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BOOKS BY HENRY WOOD 



THE POLITICAL ECONOMY 

OF 

NATURAL LAW 

English Clotli, large 12nio, price $1.25 

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THROUGH 

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THE 



POLITICAL ECONOMY 



NATURAL LAW 



BY 



HENRY WOOD 



AUTHOR OF "IDEAL SUGGESTIOX THROUGH MP;XTAL PHOTOGRAPHY' 
"GOD'S IMAGE IN MAN" "EDWARD BURTON" ETC. 



The whole icorld around us, and the whole world within us, are ruled by Law. 

The Duke of Argyll 



BOSTON 




LEE AlTD SHEPAED PUBLISHERS 3 ) 6^ ^ 



10 MILK STREET 
1894 



.'■^ 



Copyright, 1894, by Henry Wood 



All Rights lieserved 



The Political Economy of Natural Law 



Electbotyplng by C. J. Petees & Son 
Peesswokk by Rockwell & Chuechill 



PREFACE. 



This is no attempt to make people content with things 
as they are, but to turn the search for improvement in a 
promising direction. Unrest and agitation are vastly bet- 
ter than stagnation, but to bring the best results they 
must be wisely practical and in harmony with Law. 

The general purpose of this volume is the outlining of 
a political economy which is natural and practical, rather 
than artificial and theoretical. While independent of pro- 
fessional methods, it aims to be usefully suggestive to 
the popular mind. As a treatise, it is not scholastic, 
statistical, or historic, but rather an earnest search for 
inherent laws and principles. 

In 1887 the author issued a small book entitled " Xat- 
ural Law in the Business World," which was well received 
and passed through several editions. The present volume 
is substantially a new work, although a portion of the 
original matter has been retained, somewhat changed in 
form. If it contains any larger measure of truth, the 
writer will congratulate himself upon any seeming incon- 
sistency. 

The different factors of society need to be drawn to- 
gether and not rent more widely apart. Negative condi- 



6 PREFACE. 

tions exist ; but they will not be improved by stimulating 
their realism, or by the assumption that they are inherent. 
Idealism is as wholesome in sociology as elsewhere. True 
sympathy for prevailing ills does not express itself in a 
morbid pessimism, but in pointing out the road to improve- 
ment and in inspiring hope and courage. 

Conventional political econom}-, as professionally for- 
mulated, lacks a practical element which renders it of lit- 
tle utility in actual experience. Not being fitted into the 
nature and constitution of man, it is largely a mass of 
fine-spun intellectual abstraction. If the absorption of 
ponderous tomes of scholastic political economy does not 
add to one's equipment for the practical business of life, 
it is not easy to discover its usefulness. 

The " cause of labor " has been injured by crowding 
under its banner many fallacies, and even more by the 
assumption that its interest is naturally antagonistic to 
that of other social elements. Society is a complex or- 
ganism, or Greater Unit, and '^when one member suffers, 
all suffer." The mischievous doctrine of a necessary di- 
versity is largely responsible for prevailing frictions and 
antagonisms. The fault is not with the "social system," 
but with abuses which are the fruitage of moral delin- 
quency in personal character. Labor and capital, when 
deepl}' defined, melt into each other. 

The " labor problem " will never be solved by mere 
sentimental and professional treatment. The laborer often 
suffers more from the mistaken action of his professed 
champions than from the natural ills of his condition, and 
this will continue so loner as he is led into a moral and 



PREFACE. 7 

economic antagonism. A deep and diligent search for 
causes and remedies should take the place of a mere su- 
perficial rehearsal of woes. Not only the human consti- 
tution, but the world in general, would have to be made 
over before the chimerical plans of professional '' labor 
reformers'" could be made operative. Artifice can never 
be substituted for evolution and Natural Law, 

The writer will yield to no one in the intensity of 
his desire to promote, not only the public weal, but the 
interest of labor in its completeness. In whatever way 
superficial critics may construe detached statements of 
this book, the fact will remain that its deepest intent 
and aninuis is the true welfare of the workingman. 

The recognition of the universality of Law is the great- 
est achievement and inspiration of modern times, and it 
is no less regnant in social economics than in physical 
science. Circumstances and conditions change, but the 
orderly sequences of Natural Law continue uniform. All 
improvement must come through a better interpretation 
of and conformity to its immutable lines. 



CONTENTS 



PAGE 

I. General Principles 11 

II. Supply and Demand 23 

III. The Law of Competition 33 

IV. The Law of Co-operation 41 

V. Labor and Production 49 

YI. Combinations of Capital .59 

VII. Combinations of Labor 73 

VIII. Employers and Pkofit Sharing 97 

IX. Employees: Their Obligations and Privileges 107 

X. Governmental Arbitration 115 

XI. Economic Legislation and Its Proper Limits . 121 

XII. Dependence and Poverty 133 

XIII. Socialism as a Political System 143 

XIV. Can Capital and Labor be Harmonized ? . . l.")7 
■XV. Wealth and Its Unequal Distribution . . . lt)9 

XVI. The Law of Centralization 185 

XVII. Action and Reaction, or "Booms" and Panics 195 

XVIII. Money and Coinage 209 

XIX. Taeiffs and Protection 225 

XX. The Modern Corporation 237 

XXI. The Abuses of Corporate Management . . . 245 

XXII. The Evolution of the Railroad 255 

XXIII. Industrial Education 271 

XXIV. Xatural Law and Idealism 283 

Analytical Index 297 



GENERAL PRINCIPLES. 



" Mark what unvaried laws jjreaerve each state, 

Laws ivise as nature, and as fixed as fate.''' 

Pope. 

" There is a Jiigher law than the constitution." 

William H. Seward. 

" All are hut j^arts of one stupendous whole, 

TT7io.se body nature is, and God the soul.''^ 

Pope. 

" Whemce pass from the phenomena, of Matter to the phenomena 
of Mind, we do not j^ass from under the Beign of Law." 

The Duke of Akgyll. 



THE POLITICAL ECONOMY OF 
NATURAL LAW. 



I. 

GENERAL PRINCIPLES. 

Before entering upon anj^ sj^stematic study of tlie inher- 
ent economic laws wliioli permeate and shape the business 
Avorhl as it is at present constituted, it is well to suggest 
that many existing limitations at some future period may 
he outgrown. Natural Law is never suspended or repealed 
l)y an}" force Avhich can be exerted upon the saine plane ; but 
it is axiomatic that a higher law may overcome a lower one. 
AVhen we lift a weight, gravitation is not suspended, but its 
force is overcome by the superior law of the human will. 
Tree-life causes the sap to ascend, not by repealing gravity, 
but by surmounting it. The predominant motive of social 
economy, on the present plane of human development, is 
self-interest ; but this does not always amount to selfishness, 
nor does it imply that individual interests are necessaril}- 
antagonistic to each other. Normal self-interest is not only 
honest, but entirely compatible with philanthropy. But 
Avhen, in the hoped-for golden period of the future, human- 
ity comes into a general recognition of the higher law of 
unselfishness, this superior force will reach down and over- 
come many laAvs that are inherent and unrepealable on their 
own plane. Such an advanced condition of society is to be 
earnestly labored for ; but any present study of business 
tendencies must be made in the light of existing conditions 

13 



14 THE POLITICAL ECONOMY OF NATURAL LAW. 

and developments. Nationalists and communists, even 
though well-intentioned — as the great majority undoubtedly 
are — will never be able to galvanize unselfishness upon 
humanity from the outside, through governmental legisla- 
tion or communistic social framework. It will only be un- 
folded as the natural outward expression of higher internal 
character. 

Natural Law, as it is considered in this work, embraces 
in its scope the forces and tendencies which are at present 
operative. To hasten the evolution of higher social and 
economic conditions, a beginning must be made among 
the existent underlying antecedents which will produce 
them. Any inversion of this natural order will retard the 
coming ideal. To spend our time and energy on the outside, 
is only to whiten the '' sepulchre." Higher attainments in 
any department are helped forward by the faithful use of 
those already actualized. When the grand reign of unself- 
ishness is finally ushered in, it will come as an evolution- 
ary growth, "without observation." It will be just as 
"natural," in its due course, as any of the loAver accom- 
plishments which preceded. Forces now operative will 
never I^ repealed in their own province, but gradually out- 
grown. The hope of the future lies entirely in the expan- 
sion and upliftment of character. When altruism and 
brotherhood are kindled in the human soul, they will find 
outward manifestation, and nothing can prevent it. All 
growth is from within, outward, for such is the eternal 
order, and no human power can reverse it. The unnatural 
cannot be made natural, or grapes gathered from thistles. 
The most ideal and perfect legislation that it is possible to 
conceive is powerless to raise men from the plane of self- 
interest. Lifting force comes from internal education and 
evolution. 

The present " social system " — bearing in mind that 
its abuses are no real part- of it- — is the only one thut will 



GENERAL PRINCIPLES. 15 

serve humanity in its present stage of development. As 
well fit an artificial shell to the back of a tortoise, as to 
frame any new external order to suit present ethical con- 
ditions and necessities. There are many such artificial 
shells proposed, each of which is warranted to fit — in fact 
to be a universal panacea — for existing ills. Among them 
are, land in common, governmental transportation, an in- 
come tax, limited fortunes, unlimited silver, gold mono- 
metallism, unlimited '' greenbacks," a high tariff, a low 
tariff, free trade — all these and many more. Without any 
argument at present as to the merits or demerits of these 
proposed measures, the point is only made in this connec- 
tion that it is beyond their power and range to remedy 
existi:ig economic ills. If ever the time arrives when true 
socialism pure and simple is practical, as a form of govern- 
ment, neither it nor any other external system will be 
needed. At that high evolutionary stage every man can 
and may be a law unto himself. Non-resistance and un- 
selfishness will then comprise the brief but unwritten code 
of humanity. At j)resent, any new or forced artificial social 
framework would rather retard than aid a natural growth 
towards more ideal conditions. 

Economic evils, now so prominent and universal, are not 
the outcome of the present '' social system," but of the 
abuses which fasten themselves to it, consequent upon 
general moral delinquency. They are not a real part of 
it, but are like barnacles on the bottom of a ship. Human 
pride is reluctant to look within for deficiencies, but will 
roam to the ends of the earth to locate them outside. There 
is no social system, or any other human institution, so per- 
fect, that abuses do not creep in. Stealing and cheating are 
abuses. They are not a normal but an abnormal part of 
the present order. These reflections are pertinent because 
sentimental theorists make our social system the scape- 
goat for almost every overt violation of the Decalogue. 



16 THE POLITICAL ECONOMY OF NATURAL LAW. 

Every genuine has its counterfeit, and every positive its 
negative. The present order, in its purity, is the only one 
for existing conditions, because it is their natural index 
and outcome. It fits what is back of it as the photograph 
represents the negative. The outer must correspond with 
the inner, else law and sequence would be at fault, and the 
chain which binds cause and effect be severed. 

In political economy, as elsewhere, an intelligent study 
of phenomena is only possible in the light of its unseen 
though ever potent laws and causation. The most useful 
knowledge that is attainable in any realm embraces pri- 
marily the comprehension of its underlying relations and 
chains of sequence. The scientific standpoint from which 
to view human manifestations takes iu, not merely present 
activities, but those which reach backward and forward. 
Phenomena are the exact fruitage of antecedents. Science 
formerly made but slow progress, because its attention was 
fixed upon superficial manifestations, while hidden beneath 
them were the universal and immutable forces of law. The 
effort has always been made to " patch up " from the out- 
side, whereas real growth takes place in layers from the 
centre outward. 

The phenomena of electricity have been before the eyes 
of the world for all the past centuries, but until recently 
there was little systematic study of its laws. Now that 
these are beginning to be grasped, it ceases to be mere un- 
interpreted manifestation, and becomes a tamed and benefi- 
cent agent of utility. The world has been almost surprised 
to find that Natural Law can invariably be relied upon. 
In the whole illimitable cosmos, material and immaterial, 
there is nothing capricious or uncertain. At first glance, 
there is much that seems to happen ; but it may be safely 
assumed, that no event ever took place without an endless 
chain of causation leading up to it, link by link. 

The scope of orderly law being unlimited, it manifestly 



GENERAL PRINCIPLES. 17 

includes every side and phase of social economics. In the 
economic domain, statistics, tariffs, coinage, currency, cap- 
ital, and labor have received abundant study ; but all these 
are only the multiform visible expressions of the working 
of natural law. Either of them when considered by itself, 
outside of its larger unitary relations, becomes dispropor- 
tionate and misleading. Events are unimportant except as 
their significance is interpreted. Statistics are only finger- 
boards to show the way to law -fulness. Their meaning and 
relation is the real problem pressing for solution. On the 
troubled surface of the sea of finance there is a confused 
array of facts, events, ups and downs, sentiments, and 
opinions, which are well-nigh valueless so long as they lack 
orderly translation. 

If Natural iLaw in its immutable tendencies be reliable, 
and also serviceable when intelligently comprehended, it is 
important that its hidden leadings be searched for and dis- 
covered. But to successfully accomplish this, we must 
divest ourselves of all prejudice, and seek the truth for its 
own inherent value. Its deep lines can never be bent or 
distorted, but owing to preconceived theories numerous sub- 
jective illusions and inversions are possible. The desire to 
find a certain opinion true, often clouds the reality. To 
truly learn, it is necessary to unlearn. The vital truth is 
always beneficent, even if at first sight it have an unwel- 
come, or possibly an adverse aspect. To find the "whys 
and wherefores "' of any fact is a long step towards divining 
its place and use. Take the law of competition. Viewed 
superficially — especially when applied to labor — it has 
liard and repulsive aspects. Shall Ave then deny the ex- 
istence of such a law, and denounce all competitive eifort as 
unmitigated selfishness, or not rather look deeper to see 
if correct interpretation will reveal utility and even benef- 
icence ? Is there constructive competition as well as that 
which is destructive ".' May it not be its abuse which is 



18 THE POLITICAL ECONOMY OF NATURAL LAW. 

adverse, and will not a more discerning view show that it 
supplements co-operation ? Is there not healthful competi- 
tion as well as that which is unhealthful ? Can there 
not be competitive giving, being, and doing, as well as get- 
ting and monopolizing ? It is far wiser to rightly adjust 
any universal principle than to deny its place, or, perhaps, 
hastily conclude that it is only "cruel." Competition be- 
tween two market-men may help to feed a whole needy 
neighborhood. Every thing has its place in the general 
unitary Whole, and when its true relations are disclosed its 
seemingly adverse features become neutralized or even trans- 
formed. A perfect sphere has roundness and smoothness, 
but its detached fragments are each irregular and jagged. 
A fact or principle viewed out of its logical environment 
does not show its truth. Any intelligent synthetic method 
is far too rare. To analyze, dissect, and sever, often snaps 
the ties of relationship and leads to unprofitable dogmatism. 
Natural Law, as applied to the domain of Political Econ- 
omy, is defined by Webster as " a rule of conduct arising 
out of the natural relations of human beings, established by 
the Creator, and existing prior to any positive precept." 
Natural Law in the economic realm is not different from 
that which runs through physics, morals, mechanics, and 
science. It is but one of the many subdivisions of Univer- 
sal Natural Law, or the grand Unity of Truth. In other 
words, the principles which reign in the department of po- 
litical economy are not artificially fenced off in a field by 
themselves, but they have a most intimate connection with 
all the other subdivisions of orderly facts. There is also a 
corresponding kinship in error. With false premises and 
a colored medium, not only one truth is subjectively trans- 
formed, but all its relations are also distorted and colored 
to correspond. In this way systems of negation are built 
up ; for with one error for a basis, a whole series must be 
evolved to harmonize with it. 



GENERAL PillNCIPLES. 19 

Natural Law is everywhere. Its lines as the}^ permeate 
the business Avorld may not be so easily traceable as in ma- 
terial science, but the evidence of their existence and rule 
is no less positive and unquestionable. But their relations 
are more complex. They are so interlaced and mingled with 
human or legislative law on the one hand, and a purely 
mental and moral economy on the other, that any study of 
one is impossible, except in its connection. They sliade 
into each other so perfectly that no line of demarcation is 
visible. 

The general perception of the uniform and universal 
reign of law has grown with the growtli of knowledge, and 
at the present time the highest aim of science is its fuller 
discovery and interpretation. Natural Law is but another 
name for the methods of the Creator ; and that being ad- 
mitted, it is evident that all just and wholesome human 
enactment must be founded upon it. That this true foun- 
dation is more generally recognized and built upon at the 
present time than in any past age, is obvious ; and this is 
especially true where constitutional and democratic forms 
of government prevail. Human law is the will of society 
in an effort to interpret natural metliod ; and although it 
may put limits on individual will, it is yet indispensable to 
human welfare. There has been a steady improvement in 
legislation and government, in proportion as Natural Law 
has been understood. Step by step the patriarchal, tribal, 
and monarchal forms of government have played their part, 
and led up to the modern republic, which is the most Avhole- 
some framework of society yet evolved. Further improve- 
ment will follow in proportion as the lines of Natural Law 
shall be wrought into the warp and woof of the social fabric. 
The key to progress and approximate perfection in every 
department, whether physical, mental, moral, or even spir- 
itual, is conformity to law. Take a few illustrations : A 
thorough observance of mental and physical hygienic law 



20 THE rOLLTICAL ECOXO-MY OF XATITRAL LAW. 

tends directly to healthful and normal individual develop- 
ment. A greater or less transgression brings a propor- 
tionate penalty. The penalty must be paid whether the 
violation be knowingly or ignorantly committed. A head- 
ache and nervous depression are very certain to follow a 
prolonged drunken revelry, but no more so than are panic 
and business stagnation to come after an era of wild specu- 
lation. That physical" disease, the effect of which is to 
gradually thin the blood toAvard a Avatery condition. Avhen 
it contiiixies unchecked, is no less certain in its logical 
results than will be the degradation of our monetary sys- 
tem to a silver or greenback basis, if at any time a process of 
dilution indefinitely continues. Legislation may for a while 
prevent the full assertion of law, but it is nevertheless an 
active, living force, unceasingly pressing in the direction of 
its natural fuliilment. A stream may be dammed on its 
way to the ocean, but the final tide-level of its waters is not 
a matter of question. It would be as reasonable to expect 
to increase the efficiency of one blade of a pair of shears by 
the mutilation of its companion, as to benefit either capital 
or labor by an antagonistic policy toward the other. Illus- 
trations might be multiplied. 

Some think it practicable to transgress natural principles 
with impunity, so long as they avoid the open violation and 
penalty of human legislation ; forgetting that the penalty 
of the former is the inevitable sequence of the transgres- 
sion. One may try to persuade himself that even eternal 
principles are elastic and subject to exceptions, for the rea- 
son that they sometimes seem to fail to assert their rule. 
But if they do not vindicate themselves speedily, we may 
be sure that they are always pressing in that direction, and 
will never be satisfied till the end is reached. TTe confine 
Avater in a tube, but its tendency to seek a level continues, 
and no human poAver can diA'est it of this inclination. 
ZSTatural LaAv is a living force, persistent, reliable, ahvays in 



GENERAL PRINCIPLES. 21 

its place and pressing to do its work. It is this invariable- 
ness which enables us to use it, and make it serviceable. 
While, therefore, it is true that we are always under its 
sovereignt}', it is no less a fact that when we comply with 
its conditions, it becomes our most valuable and indispen- 
sable co-worker. Its powerful aid, like that of steam or 
electricity, is always in Avaiting, only we must not dictate 
its methods of ojjeration. We make mistakes, and our lines 
of action are often inharmonious and contrary, while the 
operations of Natural Law are consistent and harmonious. 
Its different factors may modify, or counteract, but never 
oppose each other, for truth cannot be in opposition to 
truth. Its only warfare is with error, and its complete 
victory is simply a question of time. 



SUPPLY AND DEMAND. 



" Every natural force which we call a law is itself invisible — the 

idea of it in the mind arising by way of necessary inference out of an 

observed order of facts.'''' 

The Duke of Argyll. 



" All are needed by each one ; 
Nothing is fair or good alone.'''' 



Emerson. 



Extremes in nature equal ends produce ; 
In man they join to some mysterious use.'' 



The wings of time are black and white, 
Pied with morning and loith night. 
Mountain tall and ocean deep 
Trembling balance duly keep. 
In changing moon, in tidal wave, 
Glows the feud of Want and Have.'''' 



Pope. 



Emerson. 



II. 

SUPPLY AND DEMAND. 

Supply is positive, and demand negative. All negatives 
are seeking for satisfaction and completeness in their cor- 
responding positives. Evil is a demand for good, disorder 
for order, and darkness for light. Ugliness seeks beauty ; 
weakness, strength; and hunger, food. All positives are 
waiting to bestow themselves. These two principles never 
rest easily until united. Each will wander to the end of the 
earth to find compensation in its counterpart. 

The law of supply and demand is perhaps the most 
general and fundamental of all the brotherhood of natural 
laws, and we have direct relations with it at all times and 
under all circumstances. It lies at the foundation of all 
modern commerce, civilization, invention, and science. It 
has been the main-spring in every transaction, trade, and 
exchange, back to the time when man existed under the 
most primitive conditions. It was the basis of the first 
exchanges of ilint arrow-heads and skins among savage and 
barbarous tribes, as it also is of all the multiform currents 
and counter-currents of modern economic life. Its force 
cannot be measured. Its pressure impels mankind to work 
its behests, in gathering, transporting, and exchanging the 
products of the globe, in order that these two principles 
may meet and find satisfaction. Men will penetrate to the 
heart of tropical Africa, or the frigid regions of the Arctic 
zone ; they will dive to the bottom of the sea, or delve in 
the bowels of the earth, to bring forth all the complex 
materials of supply, in order to meet the grand aggregate of 

25 



Zb THE POLITICAL ECONOMY OP NATURAL LAW. 

universal demand. No enterprise is too venturesome, no 
effort too daring. 

Supply and demand are like the halves of a sphere, 
neither being complete without the other, and each waiting 
for the other, as necessary to produce roundness and perfec- 
tion. Throughout the whole cosmic economy each of these 
factors is not only incomplete without the other, but each 
is evidence of the existence of the other. Even in the 
spiritual world, universal analogy teaches that as man was 
created with a natural desire or demand for future exist- 
ence, that this demand will be satisfied. Demand was cre- 
ated for supply, and supply for demand, and they have an 
unerring affinity for each other. A vacuum is a demand 
for air, and cold for heat. Man's natural constitution has 
many demands, and all these are easily supplied when it is 
in a normal condition. 

Applying these principles more specifically, let us for 
illustration take the problem of furnishing the food supplies 
of a great city like London or New York. We find that 
just the required amount and variety are forthcoming from 
every quarter of the globe, and all without any system, de- 
sign, or forethought. The Chinaman is. gathering the tea, 
the Brazilian the coffee, the Dakota farmer is raising the 
wheat, and every other quarter and country of the globe 
are striving to make up the supply to fit this never ending 
demand. It does this as perfectly as if it were regulated 
by a pair of colossal balances. The element of price comes 
in and smooths off the inequalities, so that the two surfaces 
come together perfectly as though polished for the purpose. 
If a temporary, or even expected, surplus of any article oc- 
curs, the price drops just enough to increase the demand to 
the point of perfect equilibrium. If there be a temporary 
or foreseen future deficiency, the price rises, and the inevi- 
table equilibrium is restored as before. It is the element 
of price which always determines the point at which the 



SUPPLY AND DEMAND. 27 

equilibrium is reached, and price is modified by still another 
element, wliich is competition. In the event of a tendency 
toward excess, competition takes place among sellers ; and, 
on the other hand, a predominance of demand causes com- 
petition among buyers. All commercial transactions and 
prices, not only of material products, but of everything 
that has value, like rates of interest, rents, salaries, brain- 
work, as well as that of muscle, are so regulated. The 
salary of the clergyman, the fees of the lawyer, and rates 
of transportation, as well as wages for manual labor, are all 
controlled by this law. Great talent brings a high price 
because of its scarcity. Price is a relative quantity, and not 
an abstract amount. Competition among buyers may cause 
strawberries to bring a dollar a quart in April, and among 
sellers may bring them down to ten cents in June. They 
were relatively as cheap at the one time as the other, the 
price at which supply and demand became equal varying 
by so much in the different iRonths. 

These laws are elastic and beneficent ; and they adapt 
themselves to all conditions in a natural and easy way, if 
allowed to operate without interference. Not that they 
will do away with all the ills of society, or give to every 
man employment at good wages, or always give success in 
business ; for all such drawbacks are incidental to human 
fallibility and imperfection. The effect, however, of an at- 
tempt to put any forced or artificial laws in their place, is to 
increase tenfold the friction and difficulty. Such an effort 
always reacts, and is harmful to those who mistakenly hope 
for benefit. Let us adduce a few illustrations. Legislative 
interference in trying to fix rates of interest — or rather, 
one might say, in trying to take aAvay the freedom of indi- 
vidual contract — in the different States, is now generally 
admitted to be worse than useless, although years ago it was 
regarded as necessary. The effort to substitute artificial 
rates for natural ones, under penalty, not only did not ac- 



28 THE POLITICAL ECONOMY OF NATURAL LAW. 

complish the purpose intended, but actually made interest 
dearer, by obstructing supplies, injuring confidence, and by 
natural reaction. When the peculiar conditions in any 
State make money worth really more than the maximum 
legal rate, the practical rate is still further enhanced, to 
equal the risk of the penalty which the lender incurs. Both 
parties also feel that they do no moral wrong by evading a 
statute which interferes with the first principles of personal 
freedom. So generally does this view of the case now pre- 
vail, that this form of legislative interference with Natural 
Law is practically a dead letter, although in some States the 
ill-advised statutes are nominally still in force. Legislative 
interference — except to enforce impartiality — with rates 
of transportation, and with passenger, telegraph, and tele- 
phone service, is in the same line, and will, in the long run, 
be found to produce similar results. Aside from legislative 
enactment (which will be considered more fully in the chap- 
ter on Economic Legislation),^he most formidable attempts 
to force artificial prices occur in the cases of railway pools 
or combinations, speculative corners in food products and 
coal, and in labor unions. The results of these efforts are 
in the main unsuccessful, and in any case but temporary, 
and, of course, they lack the moral dignity of legislative 
interference. In the case of railway combinations, statistics 
show that in all instances where pool rates were put at a 
point much above that which may be regarded as normal, 
they were very short-lived. Such a variety of disintegrating 
and competitive influences come in, that even the most bind- 
ing agreements to maintain artificial rates soon have to yield. 
In the case of speculative combinations and corners, or 
efforts to control market prices, it may be admitted that in 
a few instances they have been apparently successful, but 
in a vastly greater number they have not succeeded, and 
often have ruined their projectors. In the successful cases, 
where one clique of operators has succeeded in cornering the 



SUPPLY AND DEMAKD. 29 

market, or in establishing artificial prices, it has only been 
in consequence of another clique selling for future delivery 
what it did. not possess — in common parlance of the com- 
mercial world called '' selling short," — which is in itself an 
abnormal condition. Any effort to artificially advance prices 
against natural consumption alone is rarely attempted, for 
to have any chance of success there must be the opposing 
clique of '•' short sellers," or those who are trying to artificially 
depress the market. Even with the large amount of " short 
selling," attempts to corner the market for food products are 
becoming more and more infrequent, owing to the increased 
rapidity of transportation, which has a strong equalizing 
tendency. Wherever such combinations have temporarily 
succeeded, the result has been brought about by peculiar 
conditions, and in a forcible manner, before iSTatural Law 
had time to assert itself. It was like Ijfting a heavy weight 
in spite of gravitation. 

There is much popular misapprehension regarding the 
power which can be exerted by " combines " to change nat- 
ural tendencies. We often see newspaper headlines like the 
following : '' The West is holding back its grain ; " or, " Chi- 
cago speculators are trying to force up the foreign markets ; " 
or, " Wall Street has combined to get up a boom ; " and many 
other similar announcements. The idea that the millions of 
farmers in the West, or that the tiiousands of operators in 
Chicago or Wall Street, could come to any general under- 
standing in regard to a uniform policy is absurd. Instead 
of any such condition of unity ever existing, there are al- 
ways two parties, knoAvn in common parlance as " bulls " 
and " bears," each of Avhich is a balance to the other, like 
the two elements under consideration. The bears represent 
the principle of supply, and the bulls that of demand ; and, 
as elsewhere, the higher or lower prices determine the point 
of equilibrium between them. So far from combination, 
not only each party, but every individual, is trying to excel 



30 THE POLITICAL ECONOMY OF NATURAL LAW. 

all others in making the most correct estimate of the nat- 
ural drift and tendency of existing conditions, and how to 
profit thereby. 

Of forced artificial prices for labor by labor unions, we 
shall refer more fully in another chapter, but in passing 
will suggest that the uniform dominion of these principles 
is not siispended in the regulation of labor values, as some 
theorists maintain. In the long run the value of the labor 
of any one is determined by its relative excellency. If arti- 
ficially forced up by combination or coercion it will soon 
react. No matter how much we might wish it otherwise, 
facts are in opposition. Not only that, but upon closer 
study we shall find that the laboring man is as much con- 
cerned in the integrity of these laws, even if he had the 
power to modify them, as any other part of society. As we 
have before noticed, the prices of brain labor are regulated 
by these two elements, and it would be a violation of all 
analogy to claim special exception in the case of muscle. 
He who tries to sow the seeds of discontent in the minds 
of laboring men by teaching such a theory, is not their true 
friend. He may be actuated by an honest, though misguided 
sympathy, but it is none the less harmful to the laborer, and 
tends directly to degrade his manliness and lessen his prod- 
uct. The sentimentalists who expect the laboring man will 
be benefited by force of combination — as though he were 
going into a combat — are mistaken. Societies of laboring 
men might be organized for social, intellectual, and moral 
purposes, and be productive of great good ; but when, as at 
present, they are constituted for the sole purpose of forcing 
artificial prices, they injure not only the laborer himself, 
but they are harmful to business and confidence, and are 
detrimental to society at large. A seller of labor, as of any 
thing else, is dependent on demand ; and demand cannot 
be coerced. Whenever that is attempted, it shrinks back. 
It is like picking a quarrel with the only friend who can 



SUPPLY AND DEMAND. 31 

help us. Supply cannot att'oxxl to repel and diminish de- 
mand. It would be a poor Avay to induce a horse to drink, 
to force his head under water. 

Demand can be stimulated, courted, and increased by 
the adoption of such a policy as will promote peaceful con- 
ditions, and inspire confidence, for the present and the 
future. Wages then rise naturally from increased demand. 
Under such conditions, every employer enlarges his capa- 
city, and as a buyer of labor has to offer higher prices to get 
it. The almost or cpute one hundred per cent advance in 
average wages Avhich has been made during the last thirty 
years, in spite of the immense immigration into the country, 
is a natural advance, and was caused by an excess of de- 
mand. If the forcing process had been continually applied 
during that period, the advance would have been much less 
marked, for the reason that the demand would have been 
injured. As we have already seen that supply and demand, 
after adjusted by price, are always equal, it follows that an 
injury to one is harmful to both. It may be objected that 
in the case of factory towns and cities, the immobility of 
labor would prevent in some degree the right adjustment 
of wages by the law of supply and demand. This may be 
true temporarily ; but there is no other practical adjustment 
possible, and therefore we have no choice. However, the 
practical immobility is never so great, but that in the event 
of any forced or continued attempt to impose artificially 
low prices upon labor by employers, a gradual but sure pro- 
cess of recovery will begin at once, and not st()[) until the 
normal rate is approximated. The emigration from such a 
factory or town may be gradual, but it will be continuous, 
until the inevitable equilibrium is reached. ' It is no com- 
pliment to the intelligence and manliness of laboring men 
to assert to the contrary. The real self-interest of the em- 
ployer is also a powerful factor, for the emigration Avould be 
from his most intelligent and desirable class of help. 



32 THE POLITICAL ECONOMY OF NATURAL LAW. 

In general, demand has grown from the cravmgs of prim- 
itive man for simple food and shelter, and these of the 
crudest character, up to the iniinite and wonderfully com- 
plex variety of desire that characterizes modern civilization, 
and supply has paralleled its track for the entire distance. 
This equal progress and the enlargement of supply and 
demand will continue in the future, and no one can fix 
their limits. Until human character is evolved to that 
degree that unselfishness becomes the unwritten and all- 
prevailing law, supply and demand will always be kept 
equal by the regulative adjustment of price. May the day 
be hastened when the higher law v-ill overcome the lower, 
and price be a thing of the past. But when it appears it 
will come voluntarily, without "observation," and for the 
reason that it is the outer index of transformed and illu- 
mined character. 



THE LAW OF COMPETITION. 



" Competition is the life of trade.'''' 

" Easy to match what others do, 

Perform the feat as well as they ; 

Hard to out-do the brave, the true, 

And find a loftier way.'''' 

Emerson. 

" There are geniuses in trade, as well as in loar, or tJie state, or*' 

letters ; and the reason why this or that man is fortunate, is not to 

be told. It lies in the man.^'' 

Ibid. 



" What greatness has yet appeared, is beginnings and encourage- 
ments to us in this direction.'''' 

Ibid. 



" We must trust infinitely to the benificent necessity which shines 

through all laws.'''' 

Ibid. 



III. 

THE LAW OF COMPETITION. 

Has competition a normal place in the realm of social 
economics ? This is a question which recently has called 
forth considerable discussion, and upon which opinions vary 
widely. In giving it an affirmative answer, we take a dif- 
ferent and broader view than that held b}' some earnest and 
sincere })hilanthropists for whom Ave have great respect. 
So far as they are concerned, their practical benevolent 
spirit is not impaired by some abstract intellectual specula- 
tions, as to what is, and what is not, the proper framework 
for an ideal social system. But with all due appreciation 
of their altruism, the fact remains, that there is a much 
more numerous class of illogical people who are induced to 
make impractical, and even harmful applications of such 
speculative theories. 

In forming a just estimate of any principle, it is impor- 
tant that a proper discrimination be made between that 
which is considered, per se, and its abuses. These, in 
reality, are only the negations of any system of positive 
good. Instead of forming any part of it, they constitute 
the lack of it. Normal competition is a natural law, and 
being deeply implanted in the human constitution, it forms 
an indispensable part of ethical economics. Knavery, cor- 
ruption, oppression, and fraud do not belong to it. They 
are Aveak spots where tliere is too little of the normal pres- 
ent order. Average character is not yet evolved up to the 
level of the '•' system," and therefore it is the former Avhich 
is at fault. When the unintelligent laborer is assured that 

35 



36 THE POLITICAL ECONOMY OF NATURAL LAW. 

Ms ills are due to the existing framework of society, he 
ignores the individual deficiencies of himself and others, 
which constitute the real source of his trouble. He is 
persuaded that a great institution, for which he is not 
responsible, is adverse, and hence he makes little effort at 
self-improvement, and imagines that he has a righteous 
quarrel with society in general. 

To compete, as defined by Webster, is "to contend, as 
rivals for a prize; to strive emulously." To be competent, 
is " to answer all requirements ; having adequate power or 
right; fitted; qualified; to be sufficient for."' The normal 
use of the term does not necessarily imply unfriendliness or 
antagonism. There is wholesome competition in heroism, 
self-sacrifice, liberality, excellence of production, and in 
high ideals and aspirations. He who, in any position, is 
eminent, is competent, or, in reality, a successful competitor. 
To speak of competition in error, crime, or cruelty, is an 
abuse, or negative application of the principle. Some sen- 
timental writers have rated it as the antithesis of co-opera- 
tion. It is rather a stimulating and necessary element of 
co-operation, for there is competition among the most earnest 
co-operators. Who will co-operate the most and best ? Evi- 
dently the successful competitor. Not because he is un- 
friendly, but relatively more competent. Competition and 
co-operation are the two hemispheres of one globe. They 
each have a necessary function in the unitary system of the 
Whole. 

The old adage that " competition is the life of trade," is 
well founded. In the business world, it consists either in 
giving a better article at the same price, or as good a one 
for less. He w^ho does these things successfully carries out 
the principle, and proves himself competent. The incom- 
petent falls behind in the competitive test, and his usefulness 
to the community of which he is a part is therefore much 
less. Competition between two gas companies may give a 



THE LAW OP COMPETITION. 37 

whole city better and cheaper light. Though the more in- 
competent of the two will suffer somewhat, a thousand-fold 
more persons receive the benefit. Take, for illustration, a 
dozen leading retail dry-goods houses in any large city. A 
stirring competition among them gives perhaps half a 
million of people better goods, lower prices, a greater variety, 
and more attentive service. It provides for the return of 
goods when unsatisfactory, guarantees quality, and allows 
exchanges. Each makes an effort to attract patronage and 
to secure a reputation for reliability and liberal treatment. 
If six of the dozen, which are the most incompetent, suffer 
somewhat in the race, it is for the benefit of the half million. 
Many of this great community are poor, and the inevitable 
rivalry works greatly to their advantage. It is a partial 
sacrifice of the few for benefit to the man}-. It is deplorable 
that competition sometimes causes seamstresses to live in 
garrets and make shirts at starvation prices ; but it should 
not be forgotten that for each one of these, a hundred poor 
people, as a consequence, buy their shirts cheaply. Again, 
were most of these shirt-makers to put aside an unfounded 
and foolish fancy as to relative social status, they could go 
to domestic service, where competition among buyers always 
insures not only good wages, but good homes. 

Perhaps the most extreme instance of successful competi- 
tion may be found in that great organization known as the 
Standard Oil Company. By its rare combination of skill, 
capital, and executive ability, it has driven a hundred, more 
or less, competing companies out of the business of refining 
petroleum. These non-competents suffer — though as a 
rule they have sold their plants to their gigantic competitor 
at good prices — but, as a consequence, sixty millions of 
people get better and cheaper light. There are a hundred 
thousand consumers of kerosene where there is one refiner. 
Eegarding the company just cited as illustrating the power 
of Natural Law, we are not defending, or even considering, 



38 THE POLITICAL ECONOMY OF NATURAL LAW. 

in this connection, tlie morality of its various specific trans- 
actions. If that has been defective, it is not tlie fault of 
our social system, but of private delinquency and the laxity 
of our legal tribunals. 

Competition is not limited to individuals and corporations, 
but its quickening impulse is felt by states and nations. 
Wherever it is most prevalent and intense, there the prog- 
ress of science, invention, and civilization is the most rapid. 

Any effort, in the business world, to excel in giving less, 
a poorer quality, or at a higher price — in short, to render 
an inferior service — is not competition. Such an effort 
would be only its absence, which might well be denominated 
m-competition. 

The sentimental prejudice existing against this universal 
law is the result of a narrow view of a single element in it, 
as seen disconnected from its relations. It is mainly in- 
dulged in by those who are unaware that law pervades the 
economic realm, but are of the opinion that it is governed 
by sentiment and impulse. 

Were it not for the ever-present stimulus of the desire 
to excel, we might still be travelling in clumsy wagons with- 
out springs, instead of the "limited express." We would 
still navigate the sea in " caravels " — if not by means of 
even cruder craft — unmindful of present luxury and speed, 
which make distant nations like next-door neighbors. 

China has made little progress in art, science, and in- 
vention for thousands of years, from the almost utter dearth 
of emulation among its people. Barbarous tribes emerge 
from savagery, ignorance, and poverty, only as rapidly 
as competition becomes mingled with, and added to co- 
operation. An Indian tribe has the latter in high degree, 
but as the former is wanting there is little individual prog- 
ress. Co-operation alone, keeps all upon the same level. 
Each is satisfied with the methods and attainments of his 
ancestors and neighbors. Competitive energy has evolved 



THE LAW OF COMPETITION. 89 

the whole fabric of modern civilization. A watch could as 
Avell I'un without a raains})ring, as the world make progress 
with this universal tonic wanting. But a sickly and senti- 
mental paternalism sees competition as a principle which is 
inimical to the interests of the " laboring man." Is such a 
man disconnected from, and an exception to, all the rest of 
Immanity ? One would so conclude, for his champions often 
assume that his welfare lies in direct opposition to that of 
the rest of society. But the fact is that competition is his 
best friend. It impels him toward the very industry, merit, 
and progress which his self-imposed leaders and guardians 
discourage. The desire to excel in the laboring man is the 
great lever to lift him higher. But for that he would for- 
ever delve on the low plane of mediocrit}-. It prompts and 
spurs him to better service and higher attainment. It up- 
lifts, not merely by pushing from behind, but through ideals 
from above. Its motto is ever, Excelsior ! Every one who 
is competent, and competing, gives the world his co-opera- 
tion by raising the general average. 

The term " laboring man " has been mistakenly limited 
in its popular significance, so as only to include those who 
labor in a particular way. The law of labor is both uni- 
versal and beneficent ; and he who strives to evade it, and 
does not in some way work, in and for the world, will suffer 
for its violation. 

The disparagement of competition by labor unions is a 
costly mistake, for it virtually puts a premium upon incom- 
petency. Individual excellence, and an ambition to rise 
above the dead level of other incompetents, meets with 
thinl}^ disguised disapprobation. A most baseless and mis- 
chievous theory has attained wide acceptance, that, in the 
process of rising, one necessarily pulls another down. The 
exact opposite is true, for every wholesome example really 
forms a general ideal and stimulus. Prevailing fallacies 
directly lessen and deteriorate product, while the irrepeal- 



40 THE POLITICAL ECONOMY OF NATURAL LAW. 

able law ever remains, that in the long run excellence alone 
confers value. The combined labor unions of the world 
cannot permanently lift wages above their natural value, 
neither can the united "trusts" of the world confer abnor- 
mal value that will last. Quality and demand together 
form the only permanent basis of value in the commercial 
world, and the united force of combination and legislation 
cannot render it otherwise. 

Were it possible to do away with the law of competi- 
tion, humanity would settle down to a stagnant level, and 
evolution be turned back. 

When, in the future, mental and spiritual evolution shall 
have ushered in the ideal reign of unselfishness and altruism, 
there will still be an active competition in kindly deeds and 
loving ministry. 



THE LAW OF CO-OPERATION. 



" In union there is strength.^'' 

" United we stand, divided we fall ^ 



Morris. 



'■'■Men ivill live and communicate, and plough, and reap, and 
govern, as by added etherial power, wheyi once they are united ; as in 
a celebrated experiment, by expiration and respiration exactly to- 
gether, four persons lift a heavy man from the ground by the little 
finger only, and without a sense of iv eight. But this union must be 
inward, and not one of covenants, and is to be reached by a reverse 
of the methods they use. The union is only perfect ivhen all the 
members are isolated. It must be ideal in actual individualism.'''' 

Emerson. 

'■'■A long pull, a strong pull, and a pull all together.'''' 



IV. 

THE LAW OF CO-OPEKATIOK 

In the preceding chapter the fact was noted that the 
laws of competition and co-operation supplement, but do 
not antagonize each other. Either, taken alone, is frag- 
mentary and incomplete. Like supply and demand, each 
rounds out its counterpart. They are therefore friendly, 
both being indispensable in the normal "Whole. 

Every orderly commercial transaction includes the co- 
operative principle. Thongh one may be a buyer and the 
other a seller the action is concurrent. The true co-opera- 
tive spirit in commerce presupposes that both parties are 
benefited. A farmer exchanges a load of potatoes for a 
coat. His need and that of the clothier are both supplied, 
and the trade is co-operation. Commerce always implies 
both competition and co-operation. It is not true that in 
business transactions, one is naturally a loser and the other 
a gainer. Both should gain. Where it is otherwise, the 
fault is not in commerce, law, or system, but in individual 
judgment or integrity. If one is cheated, there is a lack of 
co-operation. There is also a want of competition, for if 
this element be fully present it is a protection against loss, 
or a " poor bargain." In every normal commercial transac- 
tion both parties are co-operators and also gainers, because 
surrounding competition furnishes a kind of guaranty that 
neither shall lose. Viewed in itself, then, the present 
economic order, with all its inherent laws, is beneficent. 
Commerce, jper se, is altruistic. All possible failure must 
therefore find its location in individual character. 

43 



44 THE POLITICAL ECONOMY OF NATUEAL LAW. 

Co-operation as usually defined is " concurrent effort, or 
labor ; operating jointly witli another." It is a universal 
and indispensable law in man's social constitution, and in 
the world of economics. ''In union there is strength." 
Without this principle no notable human accomplishment 
would be possible. Every great edifice, city, railroad, or 
manufactory comes into existence through adaptive and 
general co-operation. Even the simplest human product 
embodies the co-o]Derative principle. A needle bears silent 
witness to the existence of a great factory where there is 
found a variety of concurrent effort employed for a single 
end. A great artist would be helpless without the co-opera- 
tive skill of the manufacturer of pigments, concerning the 
production of which he may know nothing. The principle 
is so complex and silent in its operations that Ave are largely 
unconscious of its ubiquity. 

Co-operation lies so deeply imbedded in the human con- 
stitution that it may be called an instinct. It is therefore 
common to all the inferior planes of life. A swarm of bees 
furnishes a good illustration. Below the level of humanity 
each co-operative circle is naturally confined to those of the 
same sj)ecies. The co-operation of the bee does not extend 
beyond bees, or, perhaps, is still further limited to its own 
swarm. Animal co-operation iiniformly has narroAV limits. 
When, in the ascending trend of organized life, man is 
reached, the principle broadens, and its normal and ideal 
position as a laiv begins to be realized. In proportion as 
animality is sloAvly but surely overcome, co-operation will 
continue to Aviden its scope until it becomes in action Avhat 
it noAv is ideally — all-comprehensive. 

It is undeniable that from a superficial standpoint, co- 
operation has a more attractive and unselfish aspect than 
competition. But a deeper view shows that limited co-o]Dera- 
tion usually has a basis of self-interest, if not of selfishness. 
As popularly defined, its application is ahvays restricted. 



THE LAW OF CO-OPERATION. 45 

We co-operate with those of oui- oivu union, sect, secret 
society, or political party. But what of all the rest of man- 
kind? If a man does not belong to our union, he is a 
'^ scab ; " if not to our party, he is a " demagogue." If we 
live in Colorado, Eastern people are " gold bugs," or, if in 
New York, those of the West are " silver lunatics." Not 
only co-operation, but the true co-operative spirit is held 
under restriction. Just in proportion that such is the case, 
it becomes selfish and antagonistic. Limited co-operation 
really means co-operation's negation, or absence, and thus 
it entirely fails to fulfil its ideal function. Prevailing co- 
operation is still that of the animal plane. Until limita- 
tions are outgrown it will be only elementary. Education 
comes through an adverse experience among partial nega- 
tions and rudiments. 

But all limited forms of co-operative effort are by no 
means to be condemned or discouraged. They are abuses 
only to that degree that they embody a spirit of antagonism 
toward the rest of society. An organized bod}' of carpenters 
whose mutual aim and interest is to develop moral and 
intellectual fibre among its members, to provide for their 
social recreation and enjoyment, to succor them when in 
distress and to stimulate technical and mechanical skill — 
all these embrace the true co-operative principle, though 
limited in scope. Such elements are positive and their 
limitations are only superficial. Their spirit overflows 
the boundaries of their visible application. Unions that 
operate upon such lines are working in harmony with broad 
co-operative law. But when such aims are set aside, and an 
unfriendly spirit developed towards those of the same trade 
who, in the exercise of individual freedom, do not belong to 
our union, there is a want of true co-operation. When such 
a temper becomes ruling and those of other, or no unions, 
are abused or threatened, it is purely animal co-operation, 
which is organized selfishness. 



46 THE POLITICAL ECONOMY OF NATURAL LAW. 

A co-operation^ though limited to those of the same pro- 
fession, trade, or calling, which seeks to increase its efficiency 
in service to the greater unit — society at large — is proper 
and laudable. The carpenter must not narrow his vieAV of 
the carpenter's interest entirely to his own trade, because 
his real interest is a part of, and bound up in the general 
interest. The larger is' more important than the smaller, 
and the whole than any one of its parts. This truth, though 
so fundamental, finds but little lodgement in the popular 
mind. Society, instead of being a great co-operative, har- 
monious One, is split into warring fragments. It should be 
like a grand orchestra where many dissimilar instruments 
co-operate for the elaboration of one supreme theme. Sup- 
pose that the violins co-operate alone, what becomes of the 
symphony? But some theoretical socialist will suggest 
that the orchestral illustration is quite in the line of his 
own philosophy. Let us see. Could the enactment of the 
best musical legislation, and a proclamation of all the laws 
of harmony to the united orchestra, enable it to interpret 
one of Beethoven's immortal productions ? i^o, there must 
be a preparatory individual education, and an inner inspi- 
ration, and only when these have formed the basis, is an 
orderly and harmonious expression possible. The music 
must flow forth in vibrations from within. It cannot be 
artificially imposed from without. All true unity comes 
from a drawing towards a common centre, and not from ex- 
ternal binding or hooping. If true co-operation could be 
inaugurated by legislative enactment, a single day would 
suffice for the accomplishment of a great evolutionary age- 
long process. 

The human body, in its normal condition, is an ideal 
illustration of the co-oj)erative principle. The body is one. 
No single set of members organize a union against the 
others. Concurrent effort is not limited to those having 



THE LAW OF CO-OPERATION. 47 

a like office, but embraces the most distant and unlike. 
Though some appear less important, yet all are needed and 
honorable. Paul delineated this beautiful relation not only 
religiously but scientifically. 

But a necessary and expected antagonism between the 
various members of the body -politic is everywhere assumed. 
Conventional literature, the daily press, common habits of 
thought, and general consent, all combine to create and em- 
phasize a universal disagreement. It is everywhere taken 
for granted that the interests of different sections are inimi- 
cal to each other. That of the farmer is against that of the 
manufacturer, that of the importer opposed to that of the 
exporter, and, more than all, that of the poor contrary to 
that of the rich. Class prejudice, which can only aggravate 
existing evils, is systematicall}^ stimulated. Ignorant and 
fanatical self-constituted leaders build up a fallacious polit- 
ical econoni}-, and gain a cheap notoriety by arousing section 
against section and class against class. Trades, profes- 
sions, unions, parties, and societies are led to believe, 
in all sincerity, that their interest is peculiar, and dis- 
connected from the common interest. Friction is every- 
Avhere increased, prosperity blighted, and confidence de- 
stroyed. 

Paul's illustration of co-operative activity among the 
bodily members holds equally good in the business world. 
The law is immutable, and seeming temporary and super- 
ficial exceptions do not in the least invalidate its deep, 
silent trend. They are only eddies on the bosom of a great 
river. 

Law, complied with, brings harmony, and harmony in- 
troduces prosperity. Amid all the jarring contentions of 
various " interests," the unrei)ealable principle remains 
that no " member " can more than temporarily suffer or 
rejoice by itself. The rule holds good Avhen extended to 



48 THE POLITICAL ECONOMY OF NATURAL LAW. 

nations. Any seeming advantage to one, gained through 
the misfortune of another, is only siiperficial. 

In the economic world all parties and transactions have 
real though invisible relations; but only in proportion as 
these are permeated with a genuine co-operative spirit, will 
harmony and prosperity prevail. 



LABOR AND PRODUCTION 



" He that by the plough would thrive 
Himself must either hold or drive.'''' 



" Man goeth forth unto his work ayid to his labor until the evening. 

Ps. civ. 23. 



" On bravely through the sunshine and the showers, 
Time hath his ivork to do and ive have o?f?'S." 

Emerson. 

'■'■ If all the year were playing holidays. 
To sport would be as tedious as to work.'''' 

King Henry IV. 



" Hear ye not the hum 
Of mighty workings ? " 



Keats. 



'■'■Human labor, through all its forms, from the sharpening of a 
stake to the construction of a city or an epic, is one immense ■illustra- 
tion of the perfect compensation of the universe.'''' 



V. 

LABOR AXD PEODUCTIOK 

Labor is normal ; idleness, abnormal. The physical, 
mental, and moral faculties of man were created for use, 
and it is only by their active training that they attain skill 
and excellence. That the active employment of the gifts 
and capabilities of man's nature was designed by the Creator 
is proved abundantly, both by analogy and experience. As 
all human happiness and perfection are reached by con- 
formity to law, so a non-conformity brings misery and 
unhappiness. Labor is a blessing, and idleness a curse. 
Human powers must have occupation, else they become 
withered and inharmonious. As man is constituted, it were 
better to give him the barren and sterile soil bringing forth 
weeds and thistles, to be transformed by the healthful 
activity of his energy into blooming gardens and fruitful 
fields, than to supply him with all these delightful and 
useful objects without effort and toil on his part. 

The world is full of positive possibilities, and honest 
labor is, therefore, the most staple of all commodities. 
The mistake of thinking that only manual labor is labor 
is a very common one, while the fact is that every power 
of the body and mind requires exercise ; and only by this 
activity can they fulfil their offices. Under primitive con- 
ditions, there was a general activity of body and mind, 
rather than special develo})ment in any one direction. The 
barbarian was his own tailor, carpenter, jeweller, farmer, 
and common carrier ; and his products were few and poor. 
Under modern conditions, activity is greatly subdivided, 

51 



52 THE POLITICAL ECONOMY OF NATURAL LAW. 

and education much more thorougli. Thus we have farm- 
ers, carpenters, painters, engravers, masons, and numberless 
other craftsmen, each one of whom has a special technical 
training, and, as a result, decided superiority. Each, there- 
fore, does not only his own particular kind of work for 
himself, but for all the others, because his production is far 
more perfect. So in the department of mental labor : the 
clergyman, lawyer, banker, scientist, historian, and states- 
man — all cultivate their powers in their several fields to a 
high state of efficiency ; and each has his place in rounding 
out and completing the grand unit called society. In this 
consists the great superiority of the modern state, with its 
high degree of specialized education, over the barbarous 
governments and peoples of primitive conditions. 

The scientist, historian, and bookkeeper are as truly 
laborers and producers as are they who handle a pick, 
plough, or loom. The popular use of the term " labor " as 
applied only to those who exercise muscle is erroneous. 
The brakeman in the employ of a railway company, by 
industry, energy, and ability, may rise to be its president, 
but he is no less a laborer than before, and as a man not 
necessarily any more worthy or noble. 

While a normal amount of labor is in accord with law, 
and is necessary to healthful and harmonious development, 
an excess of exertion is harmful. It is also obvious to any 
close observer that, of the two, undue mental effort is more 
wearing in its results on the health and constitution than 
too much physical exertion. The care and responsibility 
incidental to mental occupations cause many to break down 
in health ; and here again the popular idea is at fault that 
connects all hardship and suffering only with manual occu- 
pations. While, therefore, our sympathy goes out towards 
the laborer who uses a shovel for eight or ten hours in a 
day, we should not entirely overlook the weary bookkeeper 
or clerk, who often works much longer amidst unwholesome 



LABOR AND PRODUCTION. 53 

conditions and impure air. The sleep of tlie man who 
exercises muscle is sweeter, his digestion more sure, and his 
vigor greater than that of the average mental laborer. The 
idea that manual labor is in itself degrading, and to be 
avoided so far as possible, is the delusion of the present 
time. 

The ideal man is he whose physical, mental, and moral 
powers are all cultivated and harmoniously balanced. Idle- 
ness is a violation of natural law, and its companions in 
transgression are improvidence, degradation, intemperance, 
and decay. By inexorable law and logic each positive 
virtue has its corresponding negative condition of vice and 
error. 

As to the different varieties of labor, all are indispensa- 
ble, the mental as well as the physical, each in its proper 
sphere. The steam in the locomotive is a more subtle 
and immaterial factor than the boiler and wheels, but no 
less necessary and important. So the mental worker, though 
in a more refined and nominally higher sphere, is only a 
component part of a general system, and in personality is 
not necessarily above Ins fellow laborer. The test of the 
excellency of a wheel in a machine is that it fills well its 
peculiar place and office. 

Having found that Avork is natural, necessary, and in 
harmony with man's constitution, let us consider its object. 
In the economy of Natural Law, means are always in order 
to ends. Labor is the means ; production the object. The 
finished building is as much the product of the architect as 
of the carpenter or mason ; or, rather, it is the joint prod- 
uct of all. In the distinction made between mental and 
manual labor, it is evident that only the predominant ele- 
ment is referred to, for neither can be strictly jxire. The 
simplest manual task must be accompanied by a mental 
process; and likewise, the scholar or scientist must do 
some physical labor with pen or apparatus. 



54 THE POLITICAL ECONOMY OF NATURAL LAW. 

Production is only a general term for food, clothing, 
home, education, surplus. These constitute wealth, which is 
only another name for accumulated labor. The wages paid for 
labor are rather the above-named objects, than any certain 
sum of money, for the value of money consists only in the 
products that it will command. The natural aim of the 
laborer is to increase the result produced by his effort. 
How can this be done ? First, subjectively, by greater 
activity and through the cultivation of individual qualities 
which tend to success. Second, by surrounding himself 
with more favorable environment and conditions. It is 
not only in accord with Natural Law, but also with common 
sense, that individual energy and thorough training in a 
particular department are necessary for much progress in 
that line of effort. The question with the wage-worker 
should not be, how few hours or how little exertion can I 
possibly get along with ? but rather, how much can I accom- 
plish ? He who puts forth his best efforts will soon be- 
come indispensable to his employer, and his labor will 
naturally increase in value, and he himself by positive de- 
velopment will become an employer. 

Society is composed of two classes, the independent and 
the dependent. To which of these two classes a man will 
belong is, under all ordinary conditions, a matter of indi- 
vidual choice. The terms independent and dependent are 
here used in a relative and not absolute sense. There is no 
absolute independence, for interdependence is universal. 
But relatively, every one who mingles faithfulness with his 
labor aud keeps his expenditures within his receipts, is 
economically independent. This is true without much re- 
gard to the amount of difference, provided the margin be 
on the side of thrift. It is true that the situation of a wage- 
laborer is sometimes subject to contingencies, but with rare 
and local exceptions, conscientious labor is always in de- 
mand. The higher it becomes in quality, the more scarce 



LABOil AND PRODUCTION. 55 

it grows in quantity. The high grade is never plentiful, 
hence demand meets it on an elevated level, both as to 
value and stability. The highway to independence is open, 
and guide-boards are up at every turn. Just here is seen 
one of the bad effects on the laborer of actual — not ideal 
— labor unions. A member, instead of depending upon in- 
dividual merit and energy for maintaining or advancing his 
wages, relies upon the power of the union. The former is 
natural, the latter artificial. By this course he loses his 
motive for the attainment of personal superiority and nat- 
ural advancement, and settles down to the dead level of the 
dependent elements which surround and control him. 

The goal of the American laborer is the position of 
accumulated labor, or, in other words, that of proprietor. 
A continuous, even if small margin between income and 
expenditure in one direction, fixes the condition of indepen- 
dence, and, in the other, of its necessary opposite. It is not 
a matter of chance, but of law. In this country, even if a 
laborer begins in the dependent ranks, his condition is not 
a fixed one. The transition to the independent class is easy 
and plain, when the natural course of individual merit and 
effort is chosen. Examples on every hand j^rove that this 
is a universal experience, and not a matter of sentiment or 
theory. But a very small part of the wealth of this coun- 
try was inherited probably nine-tenths being the result of 
personal enterprise. Any short-cut route to success is 
uncertain, and any forced march, outside of the natural con- 
ditions of progress, or under a dictator, is generally disas- 
trous. But the broad, direct, and solid highway of individual 
industry, economy, and temperance is open always. A sur- 
plus is what the daily wage-worker should be accumulating, 
and presently it supplements his personal force with poAver 
of another kind. For such a man to try to antagonize ac- 
cumulated labor, or those Avho possess it, is to oppose the 
ver}^ principles and conditions which are his own hope and 
reward. 



56 THE POLITICAL ECONOMY OF jSTATUEAL LAW. 

The young American wage-worker who puts forth his 
best efforts, and who practises what economists call absti- 
nence, or the limiting of expenditure to less than income, 
has as good ground for expecting to become a capitalist as 
has the gardener to expect a crop from good seed deposited 
in rich and fertile soil. It is no less true that he who does 
as little as will possibly keep him in his position, and who 
has slight regard for the interests of his employer, has the 
elements in him which make it almost certain that he will 
be always a member of the dependent class. 

In regard to means favorable to increased production by 
labor which are external to the laborer, two general condi- 
tions may be mentioned : first, that of increasing the effi- 
ciency of mechanical appliances and aids ; and second, 
seeking a favorable location or propitious field for operations. 
As to the first, it is not long ago when labor-saving machines 
were looked upon as the enemy of the laboring man, and 
some of the most useful inventions were forcibly destroyed, 
and their owners persecuted. Even so recently as thirty or 
forty years ago, the opinion was quite prevalent in the rural 
districts of New England that the general advent of rail- 
roads would quite destroy the value of horses and oats. It 
was found later that the world needed both, and the result 
was just the opposite of w^hat the farmers had expected. 

_ When the printing press was first brought into use, it 
was found that with it one man could do the work of two 
hundred copyists, and, as a consequence, it was feared that 
one hundred and ninety-nine men Avould be thrown out of 
employment. But what was the result ? Soon the superi- 
ority of printed over written books, together with the lower 
price, stimulated authorship and increased the sale and use 
of books a thousand-fold, and employment was given to 
more printers than there were copyists before. Besides this 
direct result, there were in addition the related occupations 
of paper-makers, book-binders, book-sellers, and various 



LABOR AND PRODUCTION. 57 

others, so that the final outcome was the demand for many 
times the number of persons who seemingly lost their occu- 
pation when the invention came into practical use. And 
this, as the result merely of an economic process, aside 
from the immense impetus given by it to learning, art, and 
science. It may be regarded as in accord with Natural Law 
that every new invention and improvement which saves 
manual labor, and adds to the comfort and convenience of 
mankind, at the same time increases and opens up new 
avenues of employment, so that, as in the instance just 
noted, it gives occupation to a greater number of operatives 
than were before required. This may require time, but the 
process is steady and sui-e. Every improved appliance not 
only increases production and adds to the varieties of occu- 
pation, but it also raises the grade of employment. The en- 
gineer who runs a locomotive has a higher quality of occupa- 
tion than he who wields a pick, for tlie reason that it includes 
more of the intellectual element. The superiority is in the 
relative grade of production, for the man who uses the pick 
is not necessarily lower or less honorable as a man. 

In general, with the progress of science and invention, 
mind has more and more asserted its supremacy over mat- 
ter, and the physical exertion of the laborer has been tem- 
pered in an increasing degree Avith the intellectual element. 
An ever increasing proportion of the aggregate work of the 
Avorld is of the mental variety. As man becomes better 
acquainted with Xatural Law, he gains in his supremacy 
over, and command of the material elements around him, 
and makes them minister to liis complex needs and desires. 
All this is to the special advantage and benefit of the man- 
ual laborer. In consequence of this, the humble cottager 
of to-day has more comfort and even luxury than the king 
in his palace could have enjoyed three hundred years ago. 
It is said that Queen Elizabeth wore the first pair of knit 
hose ever brought to England, and they were regarded as a 



58 THE POLITICAL ECONOMY OF NATURAL LAW. 

great luxury ; while now even a beggar could hardly be 
found without them. The introduction and use of the tele- 
graph, telephone, and other electrical appliances afford ex- 
amples of the conveniences now enjoyed by all classes. 
These, at the same time, open up immense fields and new 
avenues for human energy and employment. As before 
suggested, labor becomes more efficient in production by 
subdivision. The Jack-at-all-trades quality of production 
belongs to a past age ; the present tendency being towards 
perfection of detail, by means of thorough organization and 
subdivision. 

The law of progress is in the line of each member of 
society doing the particular thing which he can do best, 
and leaving everything else alone. This natural principle 
is beiug widely utilized, and, as a result, no past age can 
be compared with the present in respect to the ease, quan- 
tity, and quality of production. 

Our own country, without doubt, presents a field of oper- 
ation where the greatest possible production can be gained 
from a given amount of labor. The American youth have 
before them the most promising opportunities which have 
ever been enjoyed in any age or country. They are in- 
debted for this, not only to the fact that they have the 
command of all the accumulated skill, knowledge, and ex- 
perience of their predecessors, but that all their natural 
rights and privileges are secured to them by the beneficent 
care and protection of free government. Thej start in the 
race without any of the impediments that pertain to less 
democratic conditions. In the Old World, the fixedness of 
class, rank, and position, together with its systems of entail, 
compulsory military service, and many other influences 
which are artificial in their character, are dead-weights, 
and in opposition to the free exercise of Natural Law. 



COMBINATIONS OF CAPITAL. 



" Where large management is more economical and productive 
than small management, we shall find large concerns or none at all. 
Business, even in those lines where there is partial monopoly, is car- 
ried on with too narrow a margin of profit to endure any hut the most 
economical methods. To control the aJmses ivithout destroying the 

industries is a matter of the utmost cUfiiculty.''^ 

A. T. Hadley. 

" JL dispassionate view of the subject will, in my opinion, convince 
a competent person that the general economic function of a corpora- 
tion is to perform steadily, cheaply, and permanently, a service 
which an individual can only perform briefly, and with comparative 

inefiiciency.''^ 

C. S. Ashley. 

" Thus is the problem of Rich and Poor to be solved. The laws of 
accumulation loill be left free ; the latos of distribution free. Indi- 
vidualism will continue, but the millionnaire will be but a trustee for 
the poor ; intrusted for a season with a great part of the increased 
loealth of the community, but administering it for the community far 
better than it could or -would have done for itself. The best minds 
will thus have reached a stage in the development of the race inivhich 
it is clearly seen that there is no mode of disposing of surplus wealth 
creditable to thoughtful and earnest men into whose hands it flows, 
save by using it year by year for the general good. This day already 

dawns.''"' 

Andrew Cak>'EGIE. 



VI. 

COMBINATIONS OF CAPITAL. 

The conditions of to-day afford opportunities and induce- 
ments for the combination of capital unparalleled by any 
past era, and yet, equalizing forces have grown powerful in 
a corresponding proportion. Corporations are by far the 
most common forms of capitalistic combination ; but as they 
are considered in another chapter the present study will be 
given more especially to those modern commercial phenom- 
ena, popularly known as trusts and corners. The former 
are usually concerned in tlie manufacture of product, as well 
as its disposal, and the latter more exclusively in the ma- 
nipulation of market values. Eailroad consolidations, which 
are essentially great combinations of capital, are also noticed 
elsewhere. 

It is not easy to consider the conventional trust or corner 
from a single stand-point. There is the ethical, which is 
somewhat distinct from the economic view. These shade 
into each other in indefinable degrees, but are not identical. 
While the working of natural economic law is mainly con- 
sidered, its ethical relations are intimate and should not be 
overlooked. 

Not only from a humanitarian but from a purely moral 
stand-point, all combinations which make an effort, whether 
or not successful, to force abnormal values, deserve condem- 
nation and that only. The writer desires to emphasize this 
conviction because, while he attempts to show that they are 
" cabin'd, cribb'd, confined," by Natural Law, and have not 
a tithe of the harmful poAver — except to those who invest 

61 



62 THE POLITICAL ECONOMY OF NATURAL LAW. 

in them — that theorists have credited them with, at the 
same time he utterly denies any supposed defence of, or 
excuse for them. Let us regard the question as settled that 
all attempts to impose artificial prices for products are 
morally delinquent, even when technically legal as tested by 
legislation. The immorality is in the intention, whether it 
be wholly or partially successful, or an entire failure. But 
in any case where a trust or combination is formed for the 
purpose of greater economy, or cheaper production, and with 
the aim of selling its product at fair and not abnormal value, 
it has good reason for existence and is ethically sound. 

There is perhaps no economic topic upon which there has 
been more unintelligent and superficial reasoning than upon 
combinations of capital. Theorists, including many clergy- 
men, with good intentions, but ignorant of the practical laws 
of business, have vastly overrated the power of combined 
capital. 

Let us try to arrive at the truth, for that caiuiot be un- 
friendly to labor. It is everywhere and always a saving 
force. There is nothing that more surely clouds it than a 
sentimental pessimism. 

In a brief study of combinations of capital, as related to 
inherent social and economic forces, we will begin with the 
modern trust. Such combinations have been painted in 
lurid colors as dangerous monsters ; but in reality, owing to 
natural limitations, no one but the stockholder need fear 
them. He is the victim of flaming prospectuses, unsound 
principles, and of an inordinate ambition to gain by a 
"short cut." The adverse experience of thousands, who 
have imagined that combination could override such an 
antique law as supply and demand, is very uniform. Many 
excellent financiers, so considered, have utterly over-esti- 
mated the power of combination, and realized loss through 
investments in trusts, instead of expected gain. 

But the trust principle may be employed in accord with 



COMBINATIONS OF CAPITAL. 63 

Natural Law and the piiblic interest. To increase produc- 
tion, cheapen processes, and improve quality by systematic 
consolidation is lawful. A great university is an educa- 
tional trust. Instruction in specialties, scientific experi- 
ments, and thorough research are all more exhaustive than 
would be possible in half a dozen small disconnected col- 
leges. Likewise, factories, even though located apart, b}^ 
becoming a unit may sometimes introduce new economies 
so as to better serve society in serving themselves. 

But with the great majority of trusts now existing, 
as well as many which have come to an untimely end, 
the above enumerated objects are secondary or incidental, 
while the supreme motive is to impose abnormal values 
upon product. Hoav many well-laid schemes of this kind 
— schemes that looked so formidable as to excite appre- 
hension — have dissolved through the working of silent but 
immutable forces ! Their collapse, or disintegration, was 
purely a question of time. Their sanguine projectors, who 
thought it possible to raise a few square miles of the ocean 
above the general level, have exchanged a financial loss for 
an educational experience. A trust, even if inflated, may 
run smoothly for a short time, but presently some unlooked- 
for competition or monetary stringency dries out the " water" 
that gives it proportion, and it shrinks to its normal lean- 
ness. When the collapse comes the law of reaction brings 
its value down, teiiiporarih% nearly as much below as it has 
been above the normal level. 

It is true that during the recent era of industrial com- 
bination much profit has been realized in the organizing 
process of trusts. Suppose half a dozen factories, more or 
less, engaged in the same line of production, have a normal 
value of a million of dollars. They are consolidated into a 
trust and capitalized at three millions. If the original pro- 
jectors are able to find confiding and visionary investors 
who will buy their stock at par, they have made two mil- 



64 THE POLITICAL ECONOMY OF NATURAL LAW. 

lions. Such a profit is immoral and in violation of Natural 
Law, even though it be technically " legal." Such wealth 
is gained, not by the operation of a trust, or from the gen- 
eral public, but before it fairly begins business. The loss is 
that of the investors and not of the community. The latter 
is protected by natural limitations. Consumers are safe 
because the most powerful combination can bolster up ab- 
normal values only temporarily. Unseen and untiring 
forces are fighting against it. Demand falls off and com- 
petitive production is stimulated on every side. The market 
is soon overstocked, and values go down with such momentum 
that they do not stop until consumers have their compensa- 
tion, with interest added. A few typical examples may be 
of interest. In 1888 a trust, or syndicate as it was popularly 
called, was formed, with headquarters in Paris, for the purpose 
of gaining control of the visible and future supply of copper, 
and for the manipulation of its market price. The opera- 
tions of the great " French Copj)er Syndicate " are almost 
of dramatic interest, not only because they are thoroughly 
typical, but for the reason that the contest was the most 
gigantic one in modern commercial history. On one side 
was unlimited capital and eminent financial ability, while 
arrayed against this combination were only the silent and 
unseen forces of Law. The principles involved, being 
identical with those of scores of lesser trusts, a brief out- 
line of the operations of the famous syndicate will serve 
for illustration. "When the combination was first formed it 
had no ostensible purpose of obtaining world-wide control 
of the metal in question, but, after advancing to a certain 
point, found it necessary either to retreat at a decided dis- 
advantage, or go forward with the purpose of gaining full 
control of the main bulk of the entire copper product. 
Note the conditions. The field of operations included but 
a single metal, and that one having but limited sources of 
supply. The resources of the syndicate were immense, 



COMBINATIONS OF CAPITAL. 65 

including some of the largest banking houses of Paris and 
London, with ramifications extending to America and else- 
where. The names of financiers of world-wide reputation 
were prominent in the management. The most extravagant 
exiDectation of profits was entertained, not only by the pro- 
jectors, but by the commercial world in general. It Avas 
like a gladiatorial contest between giants. The normal value 
of copper at the beginning Avas about ten and a half or 
eleven cents per pound. The syndicate began its purchases 
quietly, storing the metal for a rise. It easil}'' secured the 
bulk of the visible supply, and made contracts with pro- 
ducers for future product at gradually advancing prices. It 
withdrew the metal from the open market and went on with 
the accumulation until the expected high prices of the future 
should enable it to realize great profits. It reasoned that 
the world must have copper, and would be obliged to come to 
them and pay their prices for it. This logic was satisfac- 
tory to the best (so supposed) financiers of the commercial 
world. Who should or could arise to dispute its supremacy ? 
Not any personal or corporate opposition, but invisible forces 
which are as unrepealable as the tides. The syndicate 
serenely paid for its copper and laid it away for the good 
time coming. Month by month the price was advanced. 
By fractions it steadily moved from eleven to twelve, thir- 
teen, fourteen, fifteen, sixteen, and seventeen cents per 
pound. Copper mining everywhere was greatly stimu- 
lated, and the output increased in unexpected degree. 
Consumption waned, not by any agreement among con- 
sumers, but because of abnormal prices. With each ad- 
vance less copper was used, and wherever possible some 
other metal substituted. In the meantime a mountain of 
shining ingots was being piled up in syndicate warehouses. 
What should be done with it ? Scores of millions were 
already invested, and still the process was constantly accel- 
erating. The longer the day of retribution was postponed 



66 THE POLITICAL ECONOMY OP NATURAL LAW. 

the more intense would it be. It came, and down went the 
price and the syndicate. Flood tide was followed by ebb — a 
very low ebb. 

Natural Law punishes its offenders without the aid of 
courts or judges. Every principle involved in the operation 
and colla^Dse of the French Syndicate is alive and unceas- 
ingly active in every lesser attempt to override inherent 
forces. Even were the entire wealth of a first-class nation 
put into the effort, the result would be the same. " Supply 
and demand," almost outlawed by modern theorists, still 
retains its pristine vigor. 

The mania for trusts has been general and suicidal. 
The insane desire for sudden wealth blinds the vision to 
adverse object lessons on every hand. A "short cut" to 
affluence is the ignis fatims of the modern business world. 
There are combinations in sugar, cordage, cotton-seed oil, 
matches, biscuit, strawboard, and numerous other products. 
The midsummer financial cyclone of 1893 swept through 
them and, generally speaking, left them shrunken and di- 
lapidated. In some cases they may again gather a little 
energy, but it is evident that the " vertebral column " of the 
industrial trust mania is seriously fractured. Panics, like 
thunder-storms, purify the air. 

A dry goods establishment, soap factory, or brewery 
cannot increase earnings simply by the magic of transfor- 
mation into a stock company with an inflated capital. Oftener 
there is a retrograde, in consequence of less careful man- 
agement and diminished economy. However, a most com- 
mendable exception is found when a private enterprise is 
merged into a stock company, at a normal valuation, for 
the purpose of a general participation of interest by em- 
ployees. 

There are a few important combinations having peculiar 
features which deserve mention. Prominent among them 
are the Sugar and Standard Oil trusts. The former has 



COMBINATIONS OF CAPITAL. 67 

been nominally transformed into a single corporation, but 
it still retains the essential trust features. Circumstances 
up to the present time have made it more than ordinarily 
successful. While its shares have been a prominent " foot- 
ball " in the stock exchange, it has paid liberal dividends, 
and just now seems quite well established. What are 
its peculiarities ? Sugar refining is an industry, the estab- 
lishment of which requires an unusual length of time and 
exceptionally large capital. Every refining plant, however, 
that may be built in future Avill have to be taken in by the 
combination on some terms, or competed with. Just in 
proportion that artificial values are imposed on product, the 
projection of new refineries will be induced. With unlim- 
ited millions of idle capital seeking permanent investment 
on a net four per cent basis, enterprise will not be dormant, 
and the public will be increasingly protected. There are 
other collateral influences which have given the sugar com- 
bination some advantage over trusts in general. Among 
them may be noted, eminently able and conservative man- 
agement and executive ability, and operation in a product 
of universal and increasing demand, together with a less 
excessive capitalization in proportion to the value of its 
aggregate output. Without here considering the merits or 
demerits of the present tariff, it is evident that forced arti- 
ficial values of much magnitude woidd cause regulative im- 
portations. The prediction is ventured that in the not 
distant future, competition in sugar-refining will so increase 
that dividends will at length be reduced to the basis of a 
fair return upon a normal valuation of the combined plants. 
Natural Law will never rest its forces until all inflation has 
been atoned for and rectified. 

What are the peculiar elements which not only have 
preserved the Standard Oil Company from disintegration, 
but given it unprecedented success ? Before attempting 
their enumeration, it may be proper to suggest, that in this 



b5 THE POLITICAL ECONOMY OF NATURAL LAW. 

connection, tlie ethical quality of its specific transactions 
with competitors is not considered, but only its relations 
with ISTatural Law and the general public. Its strong points 
as compared with other trusts may be noted : (1) It deals 
in a product which in some measure is a natural monopoly. 
Petroleum, of any amount, is the crude product of but few 
countries and localities. (2) It has stimulated demand by 
furnishing to the world good goods at normal prices. (3) 
Great executive ability, extensive operations, and improved 
and patented processes in production, all combine to give it 
cohesion and solidity. It has made itself a great unit, and, 
unlike most other trusts, is not composed of a number of 
smaller units held together by an artificial tie. But even 
this great modern phenomenon of the business world will 
not forever escape disintegrating forces. It will be a mar- 
vel if after the p»resent remarkable executive management 
shall have passed away, its place can be completely filled. 

There are some other capitalistic combinations which 
from peculiar circumstances, in various degrees, are natural 
monopolies. Typical among them may be named anthracite 
coal combinations, gas trusts, and the Western Union Tele- 
graph Company. It is at once apparent, that so far as any 
commodity or service is exempt from general competition, 
it is not fully amenable to Natural Law ; and yet, even in 
such cases, the public has much greater protection than is 
popularly supposed. Strange as it may at first seem, the 
actual safety-valve is the motive of gain. Take the West- 
ern Union Telegraph Company. Though not a natural 
monopoly, circumstances have made it a close and complete 
one. How can it realize the largest profit ? Some would 
say by charging higher rates for service, but it is probable ' 
that such a policy would result in positive loss. Demand 
would at once fall off. If present rates were doubled, many 
who now make every-day use of its facilities would do so 
but rarely, and only for imperative reasons. It is quite 



COMBINATIONS OF CAPITAL. 69 

probable that a reduction from present rates would enhance 
profits. There is a fair and normal value at which supply 
and demand meet, to the mutual advantage of producer and 
consumer. Even great corporations often mistake their 
true interest, and only learn by slow educational experience 
that their own advantage coincides with that of the public. 
If the price of telegraphic service were lowered one-half, 
only the same plant and but little more helj) would be re- 
quired. The business might increase fivefold, and telegrams 
become almost as common as communications by mail. 
Doubtless the company would serve itself in serving the 
public. The working of the same law is seen in the im- 
mense increase of railroad freights, made possible by rates 
so low that they would have been pronounced ruinous by 
experts ten years ago. 

Those combinations popularly known as corners deserve 
attention because their power for harm is so generally over- 
rated. But while the piiblic has little to fear from them, 
they are both demoralizing and disastrous to the great 
majority of their promoters. Where one party must lose 
in order that another may gain, the transaction is abnormal. 
Ideal commerce presupposes that both parties are gainers. 
No possible corner in any product can more than locally 
and temporarily affect the hone fide consumer. In a suc- 
cessful corner — which is exceptional — the ''short seller" 
is the sufferer. The ambition to '• control " some product, 
and the insane desire to acquire unearned wealth quickly, 
lead many unscrupulous business men to forget the great 
equalizing power of rapid transportation, instantaneous com- 
munication, and the general forecast of future conditions, 
all of which, more than at any previous time, render at- 
tempts to corner any product extra hazardous. Speculation 
in " futures " is the great bane of the modern business 
world; and yet it is impracticable to legislate against it, 
because genuine and speculative transactions shade into each 



70 THE POLITICAL ECONOMY OF JSTATUBAL LAW. 

other by indistinguishable degrees. Such legislation would 
also impair the freedom of individual contract, which should 
be sacredly preserved. Here, as elsewhere, a line must be 
drawn between a normal transaction and its possible abuses. 
The simple fact that a transaction is in a " future " is, in 
itself, no evidence that it is artificial or even speculative. 

As illustrative of the principles of a corner, let us out- 
line a conventional one in Chicago. Pork is selling in 
April for twelve dollars per barrel. There is a fair stock 
on hand, and many believe that in the meantime prices for 
July delivery will decline somewhat. They are therefore 
willing to sell the July " future "' for twelve dollars, or 
even, a little less, though they may not have a barrel on 
hand at the time of sale. They expect to buy for less 
before July, and thereby make a profit at the time of de- 
livery. These are " short sellers ; " and they furnish the 
opportunity for a corner, and have an equal responsibil- 
ity for it. Another party believe that natural conditions 
favor somewhat higher prices, and that by buying freely 
they can still more enhance them. They form a syndicate 
to "run a corner." They very quietly proceed, through 
their brokers, to buy up, not only the real pork on hand, 
but also that " sold short," or pork to be. Both parties 
furnish guaranty funds called " margins " for the faithful 
fulfilment of contracts. The syndicate gradually advance 
the price by their purchases. Though they may lose some- 
thing in the end on the actual pork, they expect to make 
a great deal more out of the short sellers. They crowd 
up the price by fractions to fifteen, sixteen, and finally 
to seventeen dollars before the end of July. Heavier 
" margins " are constantly required. The contest is wholly 
outside of natural conditions. The combination proceed 
confidently, and believe their adversaries are at their mercy. 
During May, June, and July, pork, naturally worth twelve 
dollars, brings much more, and it '^ pours in " unexpectedly 



COMBINATIONS OF CAPITAL. 71 

from all directions. The syndicate must take care of it, 
for to retreat would involve great loss. Stocks in neigh- 
boring cities must be reckoned with, for they all gravitate 
towards a,n inflated market. It is all piled up ; for so long 
as artificial prices are current, dealers and consumers in 
the East and Europe refrain from buying. The only mar- 
ket for the syndicate consists in the probable demand from 
the short sellers to fill their outstanding contracts. The 
operation becomes gigantic, and all available funds are 
exhausted in margins, and more called for. Collapse fol- 
lows, and pork falls five dollars, or thereabouts, in a single 
day. The combination began with great means and expec- 
tations, but miscalculated silent forces. 

The illustrative supposition just outlined was substan- 
tially paralleled by the veritable failure of a real pork 
corner in Chicago in the summer of 1893. The principles 
involved in all corners being practically identical, one typi- 
cal case will suffice for a class. 

Something more than mere magnitude must be alleged 
against combinations of capital to condemn them. The 
difficulty is not with the principle of combination, but in 
the abuses and excrescences that come through human 
avarice. The great enterprises which form an important 
part of our complex civilization cannot be carried forward 
without the herculean forces of combined capital. They 
are an embodiment on a grand scale of the law of co-opera- 
tion. But any combination, whether or not it be called a 
trust, cannot violate Natural Law with impunity. If the 
transgression be of great magnitude the inevitable punish- 
ment will be in proportion. Retribution is inherent. The 
economic, no less than the physical law of gravitation is 
never suspended. If any combination lacks organic unity 
its days are numbered. Any trust forcing artificial values 
soon galvanizes into life new and menacing competition on 
all sides. 



72 THE POLITICAL ECONOMY OE NATtJUAL LAW. 

Trust combinations have been nearly or quite as common 
in England, Germany, and France as in the United States. 
So far as they embody the abuses of combination they are 
the outcome of cupidity and ignorance. The trust has 
been a popular and demagogic "bogy," but it need not be 
feared except by the limited number who dabble in its 
stock. Its bitter penalties are stored up within its own 
boundaries. So soon as moral and economic education 
becomes more general, it will be conceded that value is 
conferred only by inherent quality, and that combina- 
tions — whether of capital or labor — are utterly incapable 
of its creation. Impersonal conditions, and not combined 
dictation or coercion, form the basis of how much a thing is 
wanted. Attraction, repulsion, and cohesion are as reg- 
nant in the world of economics as in that of matter. 



COMBINATIONS OF LABOR. 



" Every rise of loages winch one body secures by mere exclusive 
combination represents a certain amount, sometimes a large amount, 
of injury to the other bodies of workmen.'''' 



W. Stanley Jevons. 

" The highest form of co-operation is all-inclusive.''^ 

" The truth shall make you free.'''' 

John viii. 32. 

" The time, however, is past whhi the friends of human improve- 
ment can look with complacency on the attempts of small sections of 
the community, tvhether belonging to the laboring or any other class, 
to organize a separate class interest in antagonism to the general 

body of kiborers.'''' 

John Stuart Mill. 

" There is a constant danger lest the Spirit of Association should 
attempt to act against Nature instead of acting ivith it. There is, 
for example, a Law — an observed order of facts — in respect to Man, 
which the luorking classes too often forget, but which can neither he 
violated nor neglected with impunity. That Law is the Law of in- 
equality — the various degrees in which the gifts both of Body and of 
Mind are shared among men. This is one of the most fundamental 
facts of human nature. Nor is it difficult to see how it should be 

also one of the most beneficent.'''' 

The Duke of Argyll. 



VII. 

COMBINATIONS OF LABOR. 

The combination of labor is proper and legitimate. 
There is a natural esprit de corps and brotherly interest 
among those whose occupations and experiences are alike. 
They feel the impulse of the same wholesome ambition, 
and have similar obstacles with Avliich to contend. Man is 
a social being. Members of the same profession or handi- 
craft are naturally drawn together, and societies and leagues 
may be formed for many laudable purposes. Social recrea- 
tion and entertainment are indispensable among manual 
laborers, and congeniality in large measure belongs to those 
of similar habits and pursuits. Co-operation and fraternal 
interest in cases of misfortune or illness are always noble, 
but among comrades of the same calling they have a pecul- 
iar beauty and propriety. Organization is also useful as a 
regulative influence in outside relations, especially in nego- 
tiations with employers regarding hours, privileges, recrea- 
tions, and sanitarj^ supervision. There is great profit in 
reading and literary organizations, lyceums for debate, 
societies for the promotion of temperance and morals ; scien- 
tific and trade associations having for their object the 
increase of technical knowledge in the various arts and pro- 
fessions, — all these, and others that might be named, are 
of great advantage to working men. 

But in a study of labor organizations as theij exist, we are 
reluctantly forced to conclude that the various commenda- 
ble purposes above enumerated are largely lacking, and in 
their place are often installed various abuses of the princi- 



76 THE POLITICAL ECONOMY OF NATURAL LAW. 

pie of association. While the ideal labor union would be in 
the highest degree helpful, the actual and existing one is 
permeated with fallacious theories. It is necessary to note 
the short-comings of the combination, in order to evolve an 
ideal therefrom of what it may become. The very mis- 
takes of the actual union have in them an educational influ- 
ence which is a prophecy of improvement. There is an 
active evolutionary tendency which makes itself felt, and is 
even promoted by ferment, agitation, and adverse experi- 
ment. 

In noticing some mistakes of the conventional labor 
union we do not oppose the union, but suggest laws and 
tendencies which, if understood, would transform it from 
what it is to what it should be. The associative principle is 
good, but its application is at fault. Natural Law, being 
normal, is truthful. The plain facts are what the laboring 
man greatly needs. His prejudices have been played upon 
to his own detriment. Those who stimulate his envy and 
antagonism are not his real friends. They pose as his 
champions, not by showing him his honorable and indispen- 
sable place in society, but by turning him against his own 
interest as well as that of the community. Their mistaken, 
though often honest efforts develop and increase his depen- 
dency so that he becomes the victim of a false philosophy^ 
and inevitably realizes loss, both moral and pecuniary. 

Let us, in order, note some of the fundamental misap- 
plications of the associative principle. 

First. Their spirit and temper are antagonistic to cap- 
ital, or accumulated labor. 

Second. Their influence is against the exercise of 
individual industry and excellence, and tends toward 
dependency. 

Third. Personal freedom of action and contract is 
surrendered to the control of others, whose judgment is 
often faulty and prejudiced. 



COMBINATIONS OF LABOR. 77 

Fourth. They are tyrannical in their action toward all 
unorganized laborers. 

Fifth. Their logical tendency and influence are in the 
general direction of a levelling coercive socialism. 

Let us examine these points in order, as above men- 
tioned. 

First. Their spirit and temper are antagonistic to cap- 
ital, or accumulated labor. 

The idea of the necessaiy existence of this sentimental 
enmity has been industriously promulgated ; and this, com- 
bined with a degree of jealousy in human nature toward 
those whom we imagine to be better off than ourselves, has 
given popular currency to this feeling. It has become such 
a habit to speak of the " interest of labor," and the " inter- 
est of capital," assuming that each is opposed to the other, 
that we adopt the practice without thinking of its unreason- 
ableness. There is no natural antagonism, because both 
are mutual allies and necessary parts of one unit. When 
one suffers, both suffer ; and when one is prosperous, both 
are. There is no more logic in a quarrel between them than 
there would be between the right hand and the left, or be- 
tween two wheels of the same machine. Such a conflict is 
purely an invention. As well imagine a war between brick- 
laying and commerce, or industry and banking. Persons 
may disagree, but occupations, conditions, and truths, never; 
for they are all in+-erdependent parts of one unitary system. 

There are many leaders, agitators, and politicians whose 
interests lie directly in the line of keeping up this harmful 
and expensive sentiment. The machinery of labor organi- 
zations furnishes them with many opportunities to gratify 
ambition, love of notoriety, sense of power and authority, 
and to gain financial benefit and political capital. It is 
not claimed that all are influenced by such considerations. 
We are discussing principles, and not men. No doubt some 
are interested in this work who are conscientious, and sin- 



78 THE POLITICAL ECONOMY OF NATURAL LAW. 

cerely feel that they are really aiding " the cause of labor." 
Here comes in a principle before noted. With one error for 
a basis, a whole gronp of erroneous relations are evolved to 
harmonize with it so as to form a system. Assuming that 
capital and labor are enemies, the logical result would be 
combination, offensive and defensive, with close ranks, thor- 
ough discipline, and perfect equipment for warfare. 

If there were no accumulated capital, there would be no 
factories, mills, railroads, machinery, or wages. How can 
capital be our antagonist when its absence would throw us 
back into a state of barbarism ? Without it, every comfort, 
luxury, and improvement would be wanting. Its enterprise 
enlarges every field of operation, increases the demand for 
labor, and enhances its market value. 

The sentimental theorists who write on political economy 
fail to see that their teachings are contrary to the founda- 
tion j)rinciples of economic science, for the reason that their 
business education has been entirely theoretical. It would 
be an interesting experiment if some of these writers on 
" Labor Problems " would embark in real business. Let 
one of them take the management of a large manufacturing 
corporation, another the control of some railroad system, 
and a third assume the direction of affairs in a large im- 
porting or wholesale house. If consistent, they would con- 
duct these various enterprises on the sentimental basis. In 
hiring help, they would not be governed by the market 
price of labor, but pay inefficient men the same as those of 
the best grade ; or rather, perhaps, the price should be fixed 
by the local " district organization." They would pay ten 
hours' wages for eight hours' work, and employ none but 
union men, even if others were starving. The mercantile 
house would handle nothing but union goods, even if just 
as good non-union articles could be had for ten per cent 
less. The railroad manager would have no rolling-stock 
that was not made by unionists ; . and if his switchmen 



COMBINATIONS OF LABOPw 79 

struck, he would not hire other good men who might apply 
for work at the market price. He would grant the terms 
asked by the strikers, and take them back, even if he knew 
that they would strike again the next day. If he wished to 
change rules, hours, or methods, he would first get permis- 
sion from the nearest ''member of the executive board," 
whether or not that official knew anything of the nature of 
the business ; and his negotiations would be entirely with 
this official, and not with the men. It is very probable that 
in each of the supposed cases a year's trial of sentimental 
management would thoroughly satisfy the respective stock- 
holders in regard to its merits, as compared with real busi- 
ness methods. Doubtless it would also satisfy employees, 
as the various enterprises would probably have to suspend, 
and they lose their places. It is one thing to assume busi- 
ness conditions suited to a theoretical treatise, and quite 
another to act under those conditions in real life. The 
cases supposed would be only putting in practice the every- 
day claims and theories of labor organizations. Sujjpose 
that the commerce of cities and nations were conducted on 
such a basis as an experiment. We can imagine that it 
would not continue long before both laborer and employer 
would cry out for another Adam Smith to lead them back 
from chaos to the solid ground of natural principles. 

The prejudice of the wage-worker is inflamed until he 
feels that it is necessary to go into a strong combination 
for his own protection. Capital is personified to him as 
an unscrupulous, overbearing, and rich opponent, who is 
doing his utmost to crush and degrade him, and with such 
an impression his antagonism is naturally aroused. Thus 
the interests of all parties suffer. 

Second. The influence of existing labor combinations is 
against the exercise of individiud industry and excellence, 
and tends toward dependency. 

It is self-evident that when one depends upon the or- 



80 THE POLITICAL ECONOMY OF NATURAL LAW. 

ganization of whicli he is a member to maintain or advance 
his wages, rather than upon his own individual merit, he 
is on the road toward dependency. 

Good honest muscle, skill, and energy are the most 
staple of all things, and they rarely fail to meet with good 
demand. This is especially true of every one who is con- 
scientious in regard to the interest of his employer. It 
seems to he the aim of labor organizations to make the 
laborer as inefficient as possible. Theirs is a levelling pro- 
cess, and any special energy is discountenanced. One who 
displays these qualities is cultivating independence ; there- 
fore he receives no encouragement. It is assumed that 
labor is a necessary evil, and the less of it one can get 
along with the better. The theory is, that with fewer 
hours, or a smaller amount accomplished, the more room 
will be left for the employment of others of the organiza- 
tion. It requires but a glance at these well-defined tenden- 
cies to see that they are unfavorable to the formation of 
any type of character that is manly or self-reliant. The 
sentimentality of the times that looks upon the working- 
man as a poor, oppressed, down-trodden being, is absurd 
when applied to an American laborer, and his self-respect 
ought to rebel against any such assumption. 

The theory that wages are worth any specified sum, re- 
gardless of the market, is not sound ; and every workman 
of any intelligence ought to be able to see this. There is 
no other possible conclusion in harmony with Natural Law, 
but that anything, even labor, is worth just what it will 
bring in a free and untrammelled market. It is impossible 
to devise any other measurement. The idea that wages 
must yield a fair support under all circumstances, is im- 
practical in the business world. Charity is the highest and 
brightest of all virtues in its legitimate sphere ; but its 
province is not in fixing market prices. The charitable 
idea would not harmonize with the dignity of labor, and 



COMBINATIONS OF LABOR. 81 

every intelligent and self-respecting laborer would scorn 
the sentiment that he is a pauper or semi-pauper, or that 
he ought to receive what he had not fairly earned. No; 
the average Avorkingman of America is well able to take 
care of himself, and not so imbecile as to require guardian- 
ship. It is for him to decide whether or not it is for his 
interest to accept an offer for his services, or to look for a 
more favorable opportunity. He is a man ; and as such 
should do business for himself. As a social unit, he should 
strive to become an independent member of society. If in 
individual experience he make some mistakes, even these 
have educational value. 

Third. Personal freedom of action and contract is sur- 
rendered to the control of others, whose judgment is often 
faulty and prejudiced. 

The question comes to every intelligent workman : Can I 
afford to surrender my personal liberty, freedom of choice, 
duties to myself, family, and conscience, to any secret and 
irresponsible tribunal ? Ought I to consent to be ordered 
" out " or " in," regardless of my personal wishes, in a land 
where individual liberty of action is the distinguishing 
characteristic ? 

With perhaps the partial exception of the society known 
as the '' Brotherhood of Locomotive Engineers," which is a 
more intelligent and benevolent organization than the aver- 
age, the system of strikes seems to be an important element 
in the working policy of labor combinations. Strikes are 
violent efforts to defy Natural Law, and are, therefore, 
harmful and expensive. Even when apparently successful, 
it Avill be found that their influence, in the long run, is 
disadvantageous. 

The most conservative and moderate estimate of the 
yearly loss to the laboring men of the United States, caused 
by the strikes of 1886 and since, woidd mount high up in 
the millions ; and the indirect results, if their influences 



82 THE POLITICAL ECONOMY OF NATURAL LAW. 

could all be traced, would be even greater. The discharge 
of a single union man, or the retention of a non-uuionisti 
has been the excuse for strikes involving thousands, with! 
great attendant suffering and loss ; and all this to vindicated 
a supposed principle, which really turns out to be only a" 
sentimental "boomerang." Such was the nature of the 
very extensive and disastrous strike which took place in 
the spring of 1886, on what was known as the Gould sys- 
tem of railroads, extending from St. Louis to Texas. Thou- 
sands of men, many of whom had families depending upon 
their daily earnings, were " ordered oiit " of good situa- 
tions, which they never afterwards regained. Thousands of 
others, whose occupations were more or less directly con- 
nected with these men, were thrown out of employment 
and business of all kinds largely interrupted for weeks in 
three or four States, causing great loss to all classes. Much 
property was destroyed, and many non-union workers in- 
jured and maltreated. All these, and other ills too numer- 
ous to mention in detail, resulted from the ill-advised and 
cruel orders given to confiding men by labor officials. It 
is a fact beyond doubt, that what would have been a great 
and general resumption of prosperity in the business of the 
whole country, which had begun to set in strongly in the 
early spring of 1886, was not only postponed, but almost 
destroyed, by the labor disturbances which came in April 
and May of that year, like an epidemic. The same thing 
has been often repeated since. And furthermore, these 
troubles were not spontaneous in their character, but were 
" ordered," engineered, and fomented by " agitators," who 
did not belong in the ranks of the workingmen. If things 
could remain in their normal and peaceful condition, so 
that an era of general prosperity could once get under way, 
the increased demand for labor would cause a natural ad- 
vance in wages and general prosperity. One more example 
of " killing the goose which lays the golden Qgg." Natural 



COMBINATIONS OF LABOR. 83 

Law is a most powerful and serviceable friend ; but if we 
persist in its violation, we must reap the consequences. 

One or two more instances of the effect of strikes will 
suffice, for they are all quite uniform in their results. In 
July, 1886, a large number of tanners, employed in the 
extensive establishments of Salem and of Peabody, Mass., 
were " ordered out." In the end, most of the men lost their 
places, and had to remove elsewhere to find work. During 
several months, assaults, intimidation, and disorder contin- 
ued, and these towns were put to large extra expense to 
protect, as well as possible, those who wished to work. The 
indirect losses and suffering growing out of this strike can 
never be estimated. The Peabody IlepoHer gave a very 
careful estimate of the direct results on jSTov. 10, 1886. A 
personal canvass of all the shops of Salem and Peabody 
was made, and every detail carefully ascertained. It re- 
ported as follows : — 

" On July 12, 1,.500 men left work in forty-three factories, and on 
November 10 there were employed in these same factories 1,20.5 men. 
In the other thirty-one factories, 613 men went out at the same time, 
and in these factories 509 men are now at work. This makes a total 
of 2,113 men men who quit work July 12, and a total of 1,714 men 
employed in the same factories to-day. Had these men worked, 
they would have received $4.56,408. It is estimated that they have 
lost, aside from the amount received from the Knights of Labor, 
$304,272." 

As a result of the eight-hour agitation during the spring 
and summer of 1886, the pork and beef packers of Chicago 
gave that system a continued and thorough trial. As com- 
peting cities continued on the ten-hour basis, the inevitable 
result soon became apparent. The business could be done 
more cheaply at those places, and, as Xatural Law is never 
idle, the industry was rapidly transferred to them. The 
Chicago packers, finding it useless to hold out against the 
inevitable, notified their help early in November tliat they 



84 THE POLITICAL ECONOMY OF NATURAL LAW. 

would be obliged to return to the ten-hour system. Eather 
than accede to this, twenty thousand men were " ordered 
out ; " and this just at the beginning of winter, when a 
great majority had nothing ahead, and thousands had fam- 
ilies dependent for subsistence on their daily labor. The 
hostile presence of such a mass of idle men made it utterly 
unsafe for any minority to continue at work. The few who 
attempted it found their lives and homes in imminent danger. 
Plenty of non-union men, who wanted employment, could 
only be scantily protected by two regiments of infantry, 
sent at the expense of the State, in addition to a large force 
of private police. It is true that officials of the Knights of 
Labor ostensibly discourage violence, but the difficulty is 
with the system. It is a cruel thing to order twenty thous- 
and dependent and unintelligent laborers out of their posi- 
tions at the beginning of winter, and it is folly to expect 
that they will stand idly by and see tlieir places taken by 
others. It is farcical to say to them, " keep quiet," for 
these unfortunate men have a terrible pressure on them, 
forcing them not to keep quiet. 

Look for a moment at the ultimate effect of a rise in 
wages, when caused by the pressure of labor organizations, 
without striking. Por illustration : Suppose that the 
natural and competitive cost of a certain style of boot is 
five dollars per pair as produced in Lynn, and that one hun- 
dred thousand pairs are made and sold annually. Now 
suppose that the labor unions in that city get such a 
thorough control that by quiet pressure, the crimper, 
laster, stitcher, and all the various other kinds of work- 
men each establish a moderate advance, so that it then 
makes the cost of the boot five dollars and twenty-five cents 
instead of five dollars as before. The combination has 
carried its point, but has it made any gain ? The first 
effect would be felt in a lessened demand. The average man 
would wear his old boots a little longer, or buy some other 



COMBINATIONS OF LABOR. 85 

style in place of tliem. Instead of one hundred thousand 
pairs, it would be found at the end of the year that a less 
number, say ninety thousand pairs, had been the limit of 
demand. Therefore one-tenth of these workmen have 
been thrown out of employment. Now look at another 
tendency. If in Haverhill, and other competing points, 
natural competition still enables the same boot to be 
produced for five dollars, the business would at once 
begin to leave Lynn ; for, by Natural Law, it always seeks 
the cheapest producing points. Not only the general demand 
would fall off, but competition woidd soon force the Lynn 
manufacturers to stop entirely the production of this boot. 
Some of their workmen would have to sacrifice their homes, 
and move elsewhere, and that city would decline in pros- 
perity. Some one may reply that by general combination, 
the advance could be obtained at all points in the State. 
That would not in 'the least affect the first result, which was 
a lessening of general demand. But, in addition, if all sec- 
tions of the State combined, it would tend to drive the 
business to other States, to the West and other parts of the 
countr}". This would cause a loss of dollars to the Massa- 
chusetts bootmakers, in an attempt to grasp dimes. With 
the levelling influence of world-wide competition, such arti- 
ficial coercion is only harmfid. The principle illustrated in 
the case of boot manufacturing is universal in its applica- 
tion, and no kind of production is exempt from its irresistible 
control. A man might as well try to lift himself by the 
straps, when wearing a pair of these boots, as to expect to 
mount above the force of these fundamental business laAvs, 
or to escape from the penalty of their violation. 

If it loere possible hy universal combination among ivork- 
ing-men to advance wages ffty per cent, it tvould not in the 
least imj^rove their condition. The price of everything which 
they need would he enhanced in the same proportion, and 
they would have no larger surplus at the end of the year 
than they had before. 



86 THE POLITICAL ECONOMY OF NATURAL LAW. 

The system of assessments necessary to keep in motion 
all the machinery of labor organizations, including the sal- 
aries of officials, together with the very large sums neces- 
sary to maintain in idleness those who are " out," add still 
more to the burdens of the working man. War is always 
expensive ; and this conflict, not with employers, but with 
supply and demand, is a costly operation. The promises 
made by the labor agitators seem attractive and desirable, 
but their fruits turn out to be bitter. It is noticeable 
that vehement champions of the labor cause, who have 
been zealous to have the wrongs of the working man 
righted through coercion, have soon after, in many cases, 
been found in the field as candidates for some political 
office. 

When sentimental agitators try to make the working 
man restless, by teaching him that labor is a dependent 
condition, and that he is in " slavery," he should not forget 
that the average price of labor for many years has been 
steadily advancing from natural causes. It is now about 
double what it was thirty or thirty-five years ago. On an 
average, it took more than twice the amount of labor to 
buy a given amount of fiour, sugar, clothing, and most other 
family necessities, than it does at the present time. The 
single item of rent is perhaps dearer ; but with that excep- 
tion, nearly every necessity and luxury has declined during 
the period in which wages have doubled. This shows a 
great advance in labor values from the operation of Natural 
Law ; and they would have been still higher than they are 
had their rise not been obstructed during the last few years 
by the detrimental operation of labor unions. In spite of 
the infiuence of unrestricted immigration, the general rate 
of wages is more than double what it is in Europe. Every- 
thing shows that the present unrest, now existing among 
the manual laborers of America, is in no degree the result of 
changed conditions for the worse ; but that it is due to a 



COMBINATIONS OF LABOR. 87 

false pliilosoi)hy, the seeds of which are persistently sown 
by foreign agitators, whose theories are advertised so abun- 
dantly by the sensational portion of the newspaper press. 
The vagaries of the greatest extremists thus get a large 
amount of notoriety. 

In regard to boycotts, it is observable that they are un- 
business-like and revengeful in their conception, unnatural 
and un-American in their methods, and deranging in their 
effect on all legitimate business. It is a privilege and a 
necessity for the wage-worker who has limited means to 
expend, to bi;y the best goods at the lowest prices possible 
in a free market, whether or not they were made by mem- 
bers of a union. To pay more for purposes of revenge is a 
loss to the laborer, and an injury to society, of which he is 
a part. 

Fourth. Labor combinations are tyrannical in their 
action towards all unorganized laborers. 

They assume to represent labor in general, but statistics 
show that but a small part of the grand aggregate of labor- 
ing men belong to organizations. The interests of this 
large majority are, to a great extent, ignored by the public, 
and despised by the combinations. Xo matter how honest, 
industrious, and law-abiding they may be, they are '' scabs," 
and receive moral, and often physical treatment more worthy 
of criminals than law-abiding citizens. The public, with a 
singular absence of that sense of justice which is theoreti- 
cally dear to American " citizens, seems to expect more or 
less of this condition of things as a matter of course, and 
moral and social abuse, when not accompanied by physical 
assault, is treated as a matter of slight consequence. Legis- 
lative law professes to protect every man in his right 
either to buy or sell labor or any other thing of value in the 
open market. A recent writer has well said that " attempts 
to do away with this right by force, intimidation, or inter- 
ference, have their logical end in anarchy. The majest}' of 



88 THE POLITICAL ECONOMY OF NATURAL LAW. 

the law is the foundation of all liberty and prosperity, and 
every man should give it his moral support." 

Sentimental writers, as a rule, utterly ignore the great 
unorganized majority of laborers, as if no -such people 
existed. When they speak of labor, they refer only to the 
minority portion, or that which is organized. Are not these 
men 'American citizens ? and are they not entitled to com- 
mon rights and protection under a form of government which 
professes to be democratic and impartial ? They have a 
right to sell their services as they choose to willing pur- 
chasers, and when the government fails to protect them in 
this privilege, then the boasted American freedom is a farce. 
These men, as a class, are ignored by the politician in his 
zeal to bid for the labor vote, and even the newspaper press, 
as a rule, gives them scanty recognition. They are peace- 
able, law abiding, and unobtrusive, but at the same time 
form a very important part of the live-oak in the hull of 
the " Ship of State." 

Fifth. The logical tendency and influence of labor 
combinations are in the direction of a levelling coercive 
socialism. 

Socialism as a political •system will be elsewhere dis- 
cussed, but the logical tendencies which have cropped out 
of the agitations of organized labor are so marked that 
they may be briefly noted in this connection. When natu- 
ral and business principles are left behind, and sentimental 
methods adopted, all solid ground is abandoned. As well 
attempt to found a solid structure on the quicksand, or com- 
bine mathematics with fiction, as to expect that business 
can prosper with personal independence and ambition 
crushed out. The natural and logical outcome of any com- 
pulsory kind of socialism, in the end, is the disruption of 
society and government. There is a close and growing sym- 
pathy between labor and socialistic organizations, especially 
in the larger cities. The socialist holds out an alluring bait 



COMBINATIONS OF LABOR. 89 

to the ignorant masses of foreign laborers, and soon they 
are made to feel that because some others have more of the 
results of accumulated labor than they possess, the world has 
not been fair with them, and they have not had their 
'•' rights." 

The only test of the soundness of theories is contained 
in their practical working, and this renders the experience 
of Australia with organized labor of interest. Xowhere 
else on the face of the globe has unionism ever gained such 
a complete domination as it there possessed previous to its 
recent dethronement. In the Engineering Magazine for 
April, 1893, Edmund Mitchell, an able writer and economist 
of that country, gave a detailed account of the great con- 
test. It finally disrupted the unions and also nearly wiped 
out the principal colonial industries, turning prosperity into 
chaos, and tliis notwithstanding their almost unbounded 
natural agricultural and mineral resources. Four long and 
desperate strikes extended into trades, occupations, and 
localities, entirely distinct from the original controversies, 
involving thousands of innocent people in distress and bank- 
ruptcy. Among many other interesting particulars of this 
long industrial war, Mr. JMitchell says : — 

" It has to be noted that in no single instance did tliese disputes 
originate from or hinge upon a disagreement as to wages. Brusliing 
aside a few minor issues involved, we find that tlie one cause of quar- 
rel throughout was the demand on the part of the strikers for the 
exclusive recognition of unionism, and the firm determination of tlie 
employers to refuse to concede that demand. Had the unionists 
won the day, there can be no doubt that every worker in Australia 
earning his living by the sweat of his brow would have been com- 
pelled to join one or other of the labor organizations, and place him- 
self imder the domination of the small cliques of individuals in the 
big cities who make of labor agitation an exliilarating and lucrative 
profession. . To show how thoroughly labor militant in Australia has 
forced employers to combine in self-defence, let us take the great 
wool-growing industry, which adds yearly to the wealth of these colo- 



90 THE POLITICAL ECONOMY OF NATURAL LAW. 

nies from £20,000,000 to £25,000,000. The lethargy and lack of 
cohesion among pastoralists enabled the shearers' union, three years 
ago, to acquire a position of almost despotic power. Its leaders 
boasted that they controlled the shearing in ninety-five per cent of 
the wool-sheds. In the framing of the rules which regulated in 
every detail the manner in which the shearing was to be conducted, 
the employer had no voice whatever; he had either to accept them 
or to enter upon the almost impossible task of fighting the whole 
imion single-handed. Every shearer was compelled to take out 
his union ticket, paying, besides entrance fees, £1 per annum 
for the privilege; and the man who refused to submit to this 
blackmailing process was declared a pariah, by whose side no 
unionist would work or eat, was hounded from wool-shed to wool- 
shed without the chance of securing employment, and was finally 
driven out of the industry. The weapon of the boycott was ruth- 
lessly used against employers and non-unionist shearers alike; and 
some conception of the wide-reaching development of the system 
will be derived from an extract from a manifesto issued by the shear- 
ers' union: 'We intend,' ran this official document, 'to teach the 
squatter the folly of resistance to our combination. He shall not be 
allowed to shear his wool except by union labor. But if he should 
succeed in getting the wool off the sheep's back, it may rot in his 
sheds, for we shall prevent the carriers taking it to the railway; and 
should he succeed in getting it to the railway, we shall prevent it 
going to sea, for we shall call out the sailors and the officers ; and if 
it sails, we shall x)revent its discharge in London, for we shall call 
out the dock laborers.' " 

In speaking of the Broken Hill (Queensland) mining 
strike, Mr. Mitcliell observes : — 

"The leaders, who are now serving sentences in jail, showed them- 
selves to be professional agitators pure and simple. Possessed of the 
gift of fluent speech, these men, not miners by calling at all, had 
foisted themselves upon the workers' associations, and by the rhetori- 
cal trick of inflaming envious passions and stirring up strife between 
the employers and the employed, had soon attained to positions of 
personal ascendency, the toleration of which among large bodies of 
fairly-educated, self-respecting workingmen is almost incredible. The 
strike was the very opportunity desired by the leaders. At one bound 
they became persons of public importance, issuing fierce manifes- 



COMBINATIONS OF LABOR. 91 

toes, having their speeches telegraphed across a great continent, 
visiting their pickets like generals in the field, being huzzaed by the 
mob as they passed along the streets, and generally living in a constant 
vapor-bath of self-esteem and servile flattery. All these are simply 
the necessary preliminaries to securing a seat in Parliament, and 
what to a man of the working classes is a very large income, £300 
per annum, with no real hard work to do, with free railway travel- 
ling and invitations to official dinners." 

The fundamental issue in the Australian, as in all other 
attempts at unionist dictation, is : Shall the freedom of con- 
tract be destroyed ? Out of a total population of several mil- 
lions in Australia there were only seventy-five thousand 
unionists. Can there be any justice in the claim of so small 
a fraction of the able-bodied male population to monopolize 
the whole labor market ? Can they in any sense be said to 
represent the interest of Labor ? 

The abnormal state of affairs in Australia brought on a 
financial panic, and upset all industrial enterprises. Inves- 
tors will not invest but Avithdraw their means, so far as 
they can, wherever there is chronic friction and unrest. 
Australian progress was turned back, and years will be 
required for it to regain its former momentum and again 
induce siich a return of confidence as will attract capital 
and develop resources. Privates in the ranks of labor are 
often unconscious of the tyranny that is perpetrated in 
their name because it is claimed to be for their interest. 

The interests of employer and employee are one, and it 
is to the advantage of both that there should be mutual 
confidence and sympathy. The more conscientious and 
hearty the service the more the employer can afford to pay 
for it ; and the more, on an average, he will pay. Half- 
hearted service will not permanently command a high price. 
The union official strives to rend asunder the two elements 
which form the natural unit, and, in the degree that aliena- 
tion takes place, both are injured — the employee the most. 



92 THE POLITICAL ECONOMY OF NATURAL LAW. 

Any schism among members of the social organism is a 
common misfortune. Confidence in the stability of business 
conditions is the life-blood of prosperity. 

All inefficient or indifferent service causes moral decay 
in the character of the laborer. Even in abnormal cases 
where his remuneration is less than the current rate he 
cannot afford to degrade his manhood. The theory that in 
the aggregate there is a certain fixed amount of work to 
be done, and that fewer hours and less accomplishment will 
give more workmen an opportunity, is shallow fallacy. 
With peaceful conditions and prevailing confidence the- 
ever-expanding demand of the world equals any possible 
supply, and this even with all the labor-saving machinery 
that has been or will be employed. It may be asked : Do 
you favor long hours ? No ; but personal freedom. If one 
choose to work ten hours instead of eight it is his privilege, 
and no man, organization, nor even the State, has the moral 
right to coerce him. The hours of labor are growing less 
from natural causes. The workman does need time for 
mental and moral improvement, but, important as these are, 
freedom is still" more so. The sagacious employer, even 
from the sole standpoint of pecuniary success, will find it 
to his interest to shorten hours, and favor his help in every 
way that surrounding conditions will possibly allow. Natu- 
ral evolutionary progress is in the direction of shorter hours, 
but there should be no arbitrary dictation. The wise em- 
ployer will respect the manhood of his employee and keep 
up his esprit de corps. 

The seeming over-supply of labor comes from obstructive 
dictation and impaired confidence. The capitalist who 
would build a block of houses will hesitate long before 
beginning, if he is likely to be harassed by strikes, boy- 
cotts, and the walking delegate. Business and confidence 
can no more grow under such conditions than could a gar- 
den flourish were it continually trampled over in a dis- 
orderly manner. 



COMBINATIONS OF LABOR. 93 

In some departments an overstocked labor market is the 
result of a baseless fancy as to the relative social grades of 
various kinds of service. For illustration : Among the 
occupations of women, the market for good domestics, in 
excellent positions, at good wages, is never overstocked. 
But shirt makers, who might make good domestics, will 
work at starvation prices in attics, because the latter are 
regarded as socially inferior. But all genuine inferiority 
is located only in character. The sentimental economist 
seems blind to the fact that false pride, ignorance, and im- 
providence — to say nothing of intemperance and crime — 
are responsible for the over-supply of labor, and goes out 
of his way to lay the blame upon " competition " or a wrong 
" social system." He makes a complicated " problem " out 
of that which should be plain to the commonest common- 
sense. 

The law of compensation is untiring in finding the spe- 
cific gravity of every person, and in meting to him his de- 
serts. If it seem to fail in some cases from the standpoint 
of mere monetar}^ accumulation, it will not permanently 
vary when tested by the truer measurement of human har- 
mony and happiness. These are popularly supposed to be 
secured only in financial profit, and therefore wealth is ear- 
nestly sought. A deeper view, however, proves that mere 
pecuniary success is but the IcAver and smaller part of 
them. 

If pebbles could be coined into money to support every 
inefficient and improvident person, it would do him an in- 
jury, for he would miss all educational influences and disci- 
plinary penalties. It is in accord with the purest altruism 
to declare that the artificial removal of the corresponding 
punishments which are the natural fruit of the conditions 
before named Avould be positively uncharitable. If the great 
evolutionary force which pushes men toward higher charac- 
ter were wanting, progress would be paralyzed. The scien- 



94 THE POLITICAL ECONOMY OF NATURAL LAW. 

tific way to relieve suffering is to reach it through its 
causation. The ills of society are the harvest of defective 
character, and it is as logical to refer them to lunar influences 
as to the social system, land system, or the law of competi- 
tion. If ignorance and laziness were not logically followed 
by want, they would never be outgrown. Beneath all the 
seeming severity — which does and should enlist our hearty 
sympathy — natural penalties are kindly. But intelligent 
philanthroj)y will address itself to the underlying causes. 
Sentimentalism cannot improve upon, or reverse, the divine 
plan of evolutionary progress. It is prolonged cruelty to as- 
sure men that their trouble is external. The charity to be- 
stow is industrial education, self-help, faithfulness, honor, 
temperance, love, character. To misplace the fault is to be 
unkind to the individual and to society. If one leans upon 
anything outside of his own talents and powers, he is leaning 
down hill. 

The restrictions put upon apprenticeship and industrial 
education by conventional unionism are distinctly reaction- 
ary and harmful to society in general. The most helpful, 
hopeful, and important agency for the cure of prevailing 
economic ills is general industrial education, and this not 
alone for the male sex. The education of girls in household 
economy, which is becoming more general, is a great advance 
in the right direction. 

The ideal labor union would strive to make its members 
experts in their respective vocations. It would insj^ire them 
with wholesome ambition, independence, and honor. It 
would educate them technically and morally. It would 
make them men. It would fit each one to rise through nat- 
ural ambition and merit to the rank of employer. " There 
is always room at the topP 

Me7i are not working for some intangible despot called 
Capital. Both capital and labor are impersonal conditions ; 
while all injustice is personal. 



COMBIXATrONS OF LABOR. 95 

As a rule the employer hires his capital and the capitalist 
is not an employer. If either violates Natural Law the pen- 
alty is inevitable. Is this doctrine in accord with the golden 
rule or law of love ? Assuredly yes. If sin, economic as 
well as moral, did not bring penalty in its train, men would 
sin forever. 

The principles enunciated in this chapter are in the 
interest of laborers, and from their true stand]ioint. In pro- 
portion as truth is recognized prosperity will be the rule, 
wages advance, and confidence prevail. 

Prejudice and antagonism invariably bring forth bitter 
fruit, and this rule finds no exception, in any rank or condi- 
tion. 



EMPLOYERS AND PROFIT SHARING. 



" But he tohose inborn tcorth his acts commend, 
Of gentle soul, to human race a friend.'''' 

Pope. 

" And each shall care for other. 
And each to each shall bend, 
To the poor a noble brother. 
To the good an equal friend.'''' 

Emerson. 

" WJiy should a man lohose blood is warm within, 
Sit like his grandsire cut in alabaster f'' 

Merchant of Venice. 



" And learn the luxury of doing good.'''' 

Goldsmith. 



'■'■ O slavish man ! will you not bear with your own brother, who 
has God for his father, as being a son from the same stock, and of the 
same high descent f But if you chance to be placed in some superior 
station, lo ill you presently set yourself up for a tyrant? " 

Epictetus. 

" You cannot do wrong without suffering wrong. Treat men as 

pawns and ninepins, and you shall suffer as well as they. If you 

leave out their heart, you shall lose your own.'''' 

Emerson. 



VIII. 

EMPLOYEES AND PROFIT SHARING. 

Natural Law is as supreme and unrepealable, and its 
penalties as sure, in the realm of capital as of labor ; there- 
fore its dominant tendencies hold as firmly with employer 
as with employee. The sentimental alienation now existing 
between '' capital and labor " is by no means entirely due 
to the unreasonableness of the latter, the spirit of unionism, 
or the machinations of agitators. The unsympathetic hard- 
ness of the employer furnishes the soil where coercive union- 
ism takes root and thrives. Abuses, like trees, never grow 
entirely one-sided. An abnormal protuberance in any direc- 
tion indicates that there is some opposing correspondence. 
The fault of a creaking wheel is often found in its bearings. 

In production the natural unit is the combined employer 
and employee. Completeness comes from the joining of un- 
like elements, for each supplements the other. All unions 
of employers with employers, and employees with em- 
ployees, except for social and educational purposes, are 
unnatural. Superior and economical production is secured 
by a harmonious blending of the different parts which make 
up a whole. A horse and cart, being a unit for their appro- 
priate service, can accomplish more than a hundred horses 
and carts when separated, or even disagreeing. 

Before the inauguration of the factory system, when 
production was carried on under more primitive conditions, 
employer and employee Avere comparatively near together. 
But modern extension and specialization have multiplied 
the number of wage-earners under each single control, and 

99 



100 THE POLITICAL ECONOMY OF NATURAL LAW. 

put them at a distance from the proprietor. Corporate pro- 
duction also renders the welding of the parted unit still 
more difficult. Unless the chasm can be bridged, society 
loses and both parts suffer. How can the employer most 
effectually harmonize prevailing discord ? If it be impos- 
sible for him to maintain the personal nearness to his help 
w^hich was formerly the rule, something else equally good 
must be substituted. 

While business should be done on business principles, 
there is abundant room and opportunity for other obliga- 
tions outside of that of mere service rendered and paid for. 
Natural Law comprehends within its scope not only eco- 
nomic rules and methods, but it also provides an important 
place for the exercise of the kindly elements that are in- 
herent in man's nature. These, while not strictly entering 
into a business contract, surround and refine it, lighten its 
burdens, and soften its cares. They are like the springs 
and cushions to a carriage, which, while they have no direct 
relation to speed or distance, render progress much more 
comfortable and easy. Natural Law is democratic. It 
recognizes a man as a ')nan so long as he fulfils the con- 
ditions of manhood. The duties of an employer to his 
workmen are discharged with the payment of stipulated 
wages, so far as they relate to the business and economic 
sphere ; but there are other relations that cannot be ignored. 
They involve a recognition of the fact of man's intrinsic 
brotherhood, and that each individual is a part of one moral 
and social economy ; and these relations, though on another 
plane, are equally natural and necessary. As harmony with 
Natural Law always lends powerful aid in the achievement 
of success, the employer who heeds these higher claims, 
more fully discharges his obligation to society, and at the 
same time smooths the road toward his own prosperity. 

Employers should not forget that laborers are men, not 
machines. A larger consideration toward, and interest in, 



EMPLOYERS AND PROFIT SHARING. 101 

employees Avoiild largely dispel the illusion of a natural 
antagonism, on which labor unions flourish and production 
decreases. The workmen are the staff of the employer. 
A general might almost as well expect a successful cam- 
paign with his staff selected from the hostile army, as an 
employer expect good, honest service from men whose 
feelings are antagonistic, whether with or without good 
cause. Cultivate friendliness and sympathy with employ- 
ees, not by flattery, but by genuine interest in their welfare. 
There is too little personal contact and community of 
feeling. Misunderstandings and difficulties vanish when 
discussed face to face in a conciliatory spirit. Show your 
workmen that you are more truly their friend than the 
labor agitator who comes from the outside to stir up strife, 
and the hitter's occupation will be gone. In this direction, 
and this only, can the remedy for labor troubles be found. 
Disband the horizontal and combative combinations of 
laborers with laborers, and emj)loyers with employers, and 
cultivate alliances and interests in the other direction. 
This can only begin Avith some conciliation on both sides ; 
for both have been looking in the wrong direction, and 
emphasizing a selfish independence. The pecuniary success 
of both parties can only be increased by some such means. 
This change of front is very important, notwithstanding 
it is contrary to the position taken by many recent writers 
on the " labor problem," the burden of whose effort has 
been to urge working-men into combinations detrimental 
to their own interests. All such teaching renders the solu- 
tion of the " labor problem " more difficult. The head and 
hands must have one object, or else there will be friction 
for both. All that has been recommended can be done by 
the employer without injuring his own self-respect or that 
of his employee. A unity of interest between employer 
and employed is natural, because there is no competition 
between them. Competition is always horizontal, or on the 



102 THE POLITICAL ECONOMY OF NATURAL LAW. 

same plane. The natural competition of employees is with 
employees, and of employers with employers. The union 
should be in a direction to form the unit. To solidify and 
strengthen one element to the neglect of the other, is like 
sharpening one blade of a pair of shears when its com- 
panion is useless. 

The best employers naturally attract the best help, and 
such a combination has great strength. The employer must 
assume the risks and contingencies of his business ; and if 
he be wise he will cultivate all those elements which tend 
to harmony and, as a natural consequence, to success. 
Suppose that after inventories are taken at the end of the 
year, the owner distribute a certain part of his surplus to 
his faithful help ; even from a business standpoint, would 
it not be a good investment ? While not a legal obliga- 
tion, it would not be a charity, but simply a proper reward 
for special faithfulness. Can we doubt that such a course 
would be mutually beneficial in the long run ? It would 
require very strong inducements to organize a strike among 
workmen dealt with in such a spirit. An early and notable 
example of voluntary profit-sharing was given by Leclair, 
a French employer, more than fifty years ago. After suf- 
fering from the effects of discontent, antagonism, and 
unfriendly suspicion among his men, he resolved to try an 
experiment. In 1842, after calling together the most faith- 
ful of his help, forty-four in number, he threw upon 
the table a bag of gold containing twenty-three hundred 
and seventy-five dollars, distributing to each his share, 
averaging over fifty dollars per man. This was an object 
lesson that had a telling effect. Distrust was replaced by 
confidence, and a friendly interest and trust became the 
rule. When the men found that they had an interest in 
their employer's prosperity, they became faithful to every 
requirement, and performed each duty more carefully and 
thoroughly. The mutual benefits of the principle were so 



EMPLOYERS AND PEOFIT SHAKING. 103 

apparent that M. Leclaii" formally adopted it ; and although 
he died in 1872, his successors still continue the practice. 
At the present time there are more than two hundred firms 
in Europe which have adopted this plan substantially, vary- 
ing it only in minor details. Quite a large number of Ameri- 
can companies and individuals, also, have employed methods 
which are similar in spirit and practice. Messrs. Lorillard 
& Co., of New York, recently distributed in one year 
sixteen thousand five hundred dollars among their help as 
a part of the profit which they were willing to relinquish 
to their faithful workmen. 

There seems to be nothing else at the command of the 
employer so promising, aside from social and moral influ- 
ences, as profit sharing in one or another of its phases. 
Adequate pecuniary recognition must be given to special 
fidelity and length of service. The particular method of 
the applied principle will necessarily depend upon the char- 
acter of the business. The employee must become con- 
vinced that the success of his employer includes his own 
success. Under profit-sharing, as already outlined, it is 
obvious that in cases of exceptional loss the burden must 
be borne entirely by the proprietor. The plan suggested 
leaves the full legal and moral control of everything, over 
and above the stipulated wages, with the employer. But 
special liberality will promote his prosperity, and accord 
Avith Natural LaA\ , even though he may be unaware of it. 
Profit sharing is not charity, even if purely voluntary. The 
independence and self-respect of the employee must be 
preserved. The best principle is the best policy. For 
railroad and other large corporations the enhancement of 
the workman's interest may perhaps be stimulated by in- 
surance during employment against casualty or illness, or 
by a system of added percentages to ordinary wages, in- 
creasing somewhat for every continuous year of faithful 
service. 



104 THE POLITICAL ECONOMY OF NATURAL LAW. 

There are still other modifications of the principle, some 
of which are more distinctively co-operative. One of these 
has been very successfully tried for several years by the 
N. 0. Nelson Manufacturing Company, of St. Louis, of 
which a brief account may be of interest. Their experi- 
ence has been very significant. For eight years after pay- 
ing annually six per cent dividends to the invested capital, 
they divided an average of eight per ceiit dividends on 
wages also. Employees are also allowed to become share- 
holders in the company. During the financial depression 
of the summer of 1893, the employees willingly worked 
full time on three-quarters pay, for the double purpose 
of husbanding resources and joining in the probable loss 
of that exceptional year. The amount deducted from 
wages Avas to be made up out of future profits, and the 
capital shares, in any finally ascertained loss, in the same 
ratio as the wages. This is genuine co-operation, but the- 
orists will please note that the legitimate competitive ele- 
ment is still present in the relations of the company 
with neighboring companies in the same line of production. 
Under such a plan emplo^^ees become real partners, and their 
interest in the success of the company is greatly deepened. 

Another plan, sometimes practicable, is to impartially 
merge a business into a stock company and allow employees 
to acquire shares at a normal valuation. 

We advise all large employers, whether or not subject 
to " labor troubles," to thoroughly test some one of these 
devices for a consolidation of interests. They are in full 
accord with both social and economic law and promise well. 
Profit Sharing embodies the spirit that toill furnish the 
key to labor j^roblems. 

Its denunciation by niggardly and short-sighted em- 
ployers, on one hand, or selfish professional agitators on 
the other, cannot shake it, for it is founded on justice and 
humanity. Unselfishness should be the motive of the 



EMPLOYERS AND PKOFIT SHARING. 105 

employer, but even from the lower stand-point to share 
profits is to increase tliem. 

The employer should take a deep interest in the dis- 
semination of correct principles in morals, temperance, and 
hygiene among his workmen, and by his influence and aid 
further all practical movements for their improvement. 
Opportunities for this vary much in different places and 
conditions, but there is room for a great and general ad- 
vance in these particulars. Large employers whose estab- 
lishments are in small factory towns, have it especially in 
their power to accomplish much for the good of their help, 
without any sacrifice of independence on the part of the 
workmen. Perhaps the most notable experiment of this 
kind that has been tried in the United States is in the 
town of Pullman, near Chicago. As the Pullman Company 
owned the land from the start, they were able to exercise 
more perfect control than would often be possible ; but still, 
their plan might be approximated in many cases, and with 
great benefit. Though several thousand men are employed, 
no places for the sale of liquors are allowed. This alone 
secures, in general, a superior class of workmen. The 
houses for the occupation of the employees are built with 
careful regard for sanitary excellence, and in addition, are 
models m their tasteful and modest architectural effect. 
The water, gas, and sewer systems are of the most approved 
kind, and OAvned by the company. A j^ublic library, schools, 
churches, and a suitable place of amusement, receive such 
aid and oversight from the company as will insure their 
maintenance and efficiency. The rentals of the workmen's 
homes are moderate, being only sufficient to pay a fair in- 
terest on their cost, and other facilities are furnished for 
economy and comfort in living. While the workmen pay 
for everything they have, thus preserving their independ- 
ence, they are able to get the best at low rates. The Pull- 
man experiment has been very successful, and is worthy of 
imitation. 



106 THE POLITICAL ECONOMY OF NATURAL LAW. 

Many employers mistake their own interests, and add to 
their difficulties, by an unnecessary severity toward their 
employees, and the exercise of an overbearing and tyran- 
nical temper. Such a spirit is a formidable obstacle to 
success. 

What are known as ^'lock-outs" are sometimes resorted 
to, to force concessions from employees. They are unnatural, 
and in many cases cruel in their effects ; and, except in rare 
instances to counteract wholesale dictation, they are repre- 
hensible. When used for the purpose of artificially putting 
down the price of labor, they are to be condemned from a 
moral point of view ; and they also bring their own legiti- 
mate punishment, as a violation of Natural Law. Any 
kind of combination among employers, having in view 
a compulsory reduction of wages, or harder conditions, is 
unwise, because it arouses an antagonistic spirit among 
employees, and is unprofitable also in its after effects. 
Only in exceptional cases, to resist wholesale tyranny on 
the part of labor unions, on the principle of combating one 
evil with another, can there be any excuse for combina- 
tions among employers. 

What is called black-listing is also a weapon that should 
be used with extreme care, if at all, because it is very liable 
to abuse. If it were always confined to bad emjaloyees, so 
proved, it might have redeeming, and perhaps wholesome 
features. It is, however, so often employed to gratify per- 
sonal prejudice, that its legitimate use is extremely restricted. 

The natural elements tending powerfully towards suc- 
cess to an employer of labor are the development of an 
esprit de corps among his help, and the secure possession of 
their respect and good-will. An ideal establishment is one 
where employer and employee are each proud of their con- 
nection with the other. Such a combination means the 
highest wages, and at the same time the best and most 
economical production. 



EMPLOYEES: THEIR OBLIGATIONS AND 
PRIVILEGES. 



" No man is born into the loorld loJwse work 
Is not horn with him. There is always work. 
And tools to work withal, for those who loill; 
And blessed are the horny hands of toiiy 

James Russell Lowell. 

" The brave man carves out his fortune, and every man is the son 

of his own works.'''' 

Cervantes. 

" The x>eo])le never give up their liberties but under some delu- 
sion.'''' 

Burke. 



" i?e satisfied with success in even the smallest matter, and think 
that even such a result is no trifle.'''' 

Marcus Aurelius. 



^^ Never esteem anything as of advantage to thee that shall make 
thee break thy viord or lose thy self-respect.'''' 



■Men my brothers, men the workers, ever reaping something new.'''' 

Tennyson. 



" The sleep of a laboring man is sweet.'''' 

ECCLESIASTES. 



IX. 

EMPLOYEES: THEIR OBLIGATIOJTS AND 
PRIVILEGES. 

As the duties and interests of employees are touched 
upon in other connections, a direct study of them ma}' be 
concise. 

The prevailing spirit of the times tends to make the 
employee regard his employer with some degree of jealousy 
if not of antagonism. Such a feeling is both morally and 
economically unprofitable. The employer is his natural 
supplement in production, and besides, no one else is in a 
position to do so much for him. Deprived of the co-opera- 
tion of his employer's talent, capital, and executive ability, 
he is weak and incomplete. Xo man can afford to pick a 
quarrel with his productive partner, nor to antagonize the 
very things which are in the line of his laudable ambition. 
^Yithout employers there could be no employees. The 
theory that production is solely the result of physical labor, 
as urged by some socialistic agitators, is unmitigated fal- 
lacy. If material force be all that is required, then steam, 
electricity, horses and mules, and even water-power, should 
receive the main credit, leaving the human element quite 
unimportant. ]\Iatter can never bear comparison with mind, 
nor a moimtain with a man. A high order of executive 
talent is more rare than a corresponding quality of muscle, 
and therefore it always brings a higher price. Its superior 
value is not due to fashion or fancy, but to demand. The 
worth of muscle also depends upon the quality of mind 
mixed with it. To lay brick requires a larger percentage 

109 



110 THE POLITICAL ECONOMY OF NATURAL LAW. 

of mind than to dig ditclies, and it therefore readily brings 
a higher price. By the socialistic theory that the value of 
products should be abstractly estimated by the number of 
" labor-hours " put into them, the expert is no better than 
the ignoramus, and the latter might as well remain what he 
is. Under free conditions Natural Law never makes a 
mistake in weighing values. 

Education, moral, economic, and technical, is the great 
need of the wage-worker. These furnish the only solid 
basis for wages and for their increase. Obstruction and 
friction invariably tend toward their diminution. Real edu- 
cation is not the acquisition of a certain amount of " book 
learning," but the art of fitting well for present and pros- 
pective duties. It is entering u]Don a road which always 
leads higher. 

Evolution is a universal law ; but if one waits for it to 
push him from behind he advances slowly, and with fric- 
tion. Attracted from before, he makes rapid progress. 
Excellence, as an ideal, furnishes an ever-present stimulus. 
If one does his best, it does not so much matter where in 
the great field of human effort he may be to-day, for he will 
soon leave the locality behind him. Some one may suggest 
that opportunities are important, but they are largely made, 
not found. " Luck " comes to those who win it. Chance 
appears upon the surface, but a deeper view shows that all 
success comes by laiv. A trade, profession, or character is 
like an edifice ; every brick must be put in its place, and it 
will not get there by luck. 

Work is not a curse or a thing to be avoided. Eightly 
regarded, it is education and develoj)ment. To count it as 
drudgery is to gratuitously make and extract a slavish 
influence from it. Looked upon as an education and step- 
ping-stone, it is refined and ennobled, and this even if 
low conventionally in grade. To idealize one's present 
vocation is to prepare for a higher and more profitable one. 



EMPLOYEES: THEIR OBLIGATIONS AND PRIVILEGES. Ill 

Work is not to be dodged, but transformed into develop- 
ment. The man must lift bis effort, and not allow it to 
become merely mechanical. One's attitude toward it deter- 
mines what it is — to him. It also indicates whether or 
not he will advance to the rank of employer. 

The enjoyment of a vacation often causes a workman 
to feel that its indefinite continuance, were it practicable, 
would be desirable. But only because work is the rule does 
recreation possess sweetness. To a living, progressive man 
enforced idleness is a torture. Lack of occupation causes 
decay. Even when underpaid, the wage-earner, out of re- 
gard for himself, cannot aiford to do less than his best. 
Through the law of compensation every one, at length, gets 
exactly his due. Specific gravity applies not solely to 
fluids, but is universal. 

The employee naturally and rightly wants increased 
wages ; and, through Natural Law, the only road to them is 
to earn more or better. If he get them through the seem- 
ing short cut of coercion or organized pressure, they will 
soon slip back. Progress, to be solid, must be natural. 

It is often supposed that employers might pay whatever 
wages the}' please, regardless of the market; but competi- 
tive relations in innumerable directions do not permit it, 
and, as elsewhere shown, general competitive laws are as 
indispensable to wage-workers as to society at large. If 
labor-unions, instead of limiting apprenticeship and encour- 
aging idleness, — under the delusive theory that the total 
amount of work to be done is limited and fixed, — would 
educate their members, there would soon be enough for all 
to do. Each kind of labor is the patron of all the others, 
so that all may be increased by balanced growth. Obstruc- 
tion beginning in one trade is reflected and re-reflected in 
all the others until all suffer. "With complete harmony, 
wages Avould soon rise from enlarged demand. This is the 
only possible basis for an increase. With unobstructed 



112 THE POLITICAL ECONOMY OF NATURAL LAW. 

prosperity, invention and art would open new avenues of 
employment, and over-production be unknown. When the 
sewing-machine was invented no less seamstresses were 
needed, because the demand for sewing at once increased 
to the full capacity of the improvement. In every depart- 
ment, with the increase of facilities, embellishment and 
complex design take the place of plain crudeness. Fifty 
years ago only the carpenter, mason, and painter were re- 
quired to construct an average dwelling, while now a score 
of different trades lavish their skill in perfecting its con- 
venience and adornment. 

General economic confidence can only exist upon an 
adequate foundation. It especially requires a sound cur- 
rency, an unwavering tariff, whether high or low, and, 
most of all, harmonious labor conditions. With this com- 
bination, employment, for every one who desired it, would 
be sure and remunerative. Things to be done would mul- 
tiply faster than hands to do them. 

The goal of the workman is to become a proprietor, and 
under all normal conditions such an ambition is laudable. 
In our own country no individual is crystallized into any 
fixed class or grade ; and if artificial dependence, coercion, 
and the levelling influences of unionism, could be put aside, 
workmen would have an unobstructed road to progress open 
before them. If, however, in some cases it be impracticable 
to rise in grade, advancement in quality is possible, which 
is almost equally important. 

With but rare exceptions, the most eminent and success- 
ful business men of America started in active life as wage- 
workers, and their secret is that in every position they did 
their best. This was their self-education, and education 
is capital. Even when under-paid that kind of capital is 
always augmenting. W^here wealth has been acquired by 
dishonorable means it will prove a curse. The moral pen- 
alty for Natural Law violated is inherent, and is inevitably 
realized sooner or later. 



EMPLOYEES : THEIR OBLIGATIONS AND PRIVILEGES. 113 

However much specious theories may prevail, as to 
short hours, lessened production, limited apprenticeship, 
arid much leisure, individual merit will always remain the 
sole basis of value for service. Economy, energy, and ex- 
cellence may be popularly regarded as antique, but the link 
that binds success to them can never be severed. Cause 
and effect are connected by a divine welding. 



GOVERNMENTAL ARBITRATION. 



" WJiat mighty contests rise from trivial things ! " 

Pope. 



" And sheathed their swords for lack of argumenty 

Shakespeare. 

" Beware 

Of entrance to a quarrel ; but being in, 

Beaft that the opposed may beware of thee.'''' 

Ibid. 

" Thy head is as full of quarrels as an egg is full of yneaty 

Ibid. 

^^ I won'' t quarrel with my bread and butter.^'' 

Swift. 



X. 

GOVERNMENTAL ARBITRATION. 

The freedom of individual contract is the chief corner- 
stone in the structure of any system of liberal government. 
It is something that must be accorded and guaranteed to 
every citizen, whether he be high or low, rich or poor, 
employer or employee. Any legislation, or even prevailing 
custom, which tends to its impairment, is tyrannous. The 
greatest danger of the present time lurks in new forms of 
despotism imposed in the guise of humanity and philan- 
thropy. The laboring man has more to apprehend from 
special legislation — ostensibly in his behalf — than any 
one else. However plausible new legislative departures 
may seem to him in their inception, their ultimate working 
produces hardship. His real interest demands free con- 
ditions, prevailing confidence, and general prosperity. To 
create demand for labor, there must be some inducement 
for starting new enterprises, and the extension of those 
already founded. Men of means will not embark in busi- 
ness with the prospect before them of interminable friction, 
or if the State, in response to demagogic demand, proposes 
to take control of their business and deny them the right 
of free contract. 

During the last few years, many States have made 
provision for tribunals of arbitration, whose business is the 
settlement of disputes and controversies between employers 
and employees. These provisions for the macliinery of 
arbitration vary somewhat in detail, but are similar in 
general plan and operation. General experience up to this 

117 



118 THE POLITICAL ECONOMY OP NATURAL LAW. 

time confirms the conclusion that no practical or perma- 
nent benefit can be expected from legal arbitration as a 
State system. It may be of some use, morally, as a tem- 
porary expedient to bridge over chasms of active hostility, 
or for emergencies when reason has lost its sway ; but it 
is useless as a means for the permanent settlement of 
differences continually arising between capital and labor, 
while they occupy their present artificial and antagonistic 
attitude. Courts are already organized, and laws in force, 
to construe and enforce existing contracts ; but the prov- 
ince assumed by these tribunals (at least in some States) 
of making new contracts between citizens, and of fixing 
prices other than those established by supply and demand, 
is a novel and unwarranted advance in the direction of 
paternal government. 

What manufacturer can possibly have any security in 
engaging in business, if he be debarred from the natural 
right and freedom of hiring labor at its market price, or at 
a rate offered by those who are willing to sell ? It is evi- 
dent that no person or corporation will permit the State 
to transact their business for them ; and if the State insists 
upon so doing, then business must come to an end. As 
well have a State board to determine the natural or 
proper market price for potatoes, clothing, or dentistry. 
These are the product of labor ; and if the value of labor is 
to be arbitrarily fixed by the State, the same logic requires 
its application to them. During the French Revolution 
there was an attempt to do this impossible thing. Even if 
this were a proper function for this court, it is evident 
that in order to arrive at intelligent decisions, it must 
adopt rules and methods of procedure like a court of 
equity ; that is, it must call in witnesses on both sides, and 
make rap a verdict on the weight of evidence. It is also 
plain that even if the State usurped the right to make 
arbitrary contracts and prices between citizens, regardless 



GOVERNMENTAL ARBITKATION 119 

of natural or market values, no board could, possibly judge 
intelligently of the great variety of occniiations, conditions, 
and questions that would come before it. It might be able 
and honest ; but in addition, it would be necessary for its 
members to be universal experts. No two cases would be 
alike. It would not be simply a question of law and prin- 
ciple, or right or wrong ; but, rather, of materials, qualities, 
markets, credits, competition, expenses, and many other ele- 
ments which Avould all have a bearing. Aside, then, from its 
strained and unnatural jurisdiction, it would be a physical 
and mental impossibility for any board to grapple with 
?ucli a variety of i)roblems as would come before it. 

Voluntary arbitration is of value in its proper sphere, 
but the fixing of prices and forcing tlieni npon an imwilling 
purchaser is coercive. In tlie interpretation and enforce- 
ment of existing contracts arbitration is often quicker, less 
expensive, and more satisfactory than the regular process 
of law ; but its adoption must be voluntary on both sides. 
The time-honored method of settling disputes by each party 
choosing one who is familiar with the conditions, and they 
choosing the third, the tliree then acting together to make 
a just settlement, is a commendable way of adjusting differ- 
ences without requiring the intervention of a State board. 

Conciliation, however, is more useful than arbitration. 
There is an important difference between them. The former 
may be employed regardless of State law, and is always 
mutually voluntary. Often all that is necessary to settle 
serious disputes is the assistance of conciliators who possess 
the confidence and esteem of both parties. They also should 
have a thorough knowledge of all the details and peculiari- 
ties of the special business, such as would be impossible 
with any State board. By such means angry feelings and 
prejudices may often be subdued, and reason and good sense 
brought to the front. When, in a conciliatory spirit, those 
who differ can be brought to sit around the same table and 



120 THE POLITICAL ECONOMY OF NATURAL LAW. 

reason together in a friendly way, differences rapidly dis- 
appear. This would not often be the result of formal arbi- 
tration, which has the character of a court of law, in the 
fact that each side is arrayed against the other. Arbitra- 
tion, in the proper sense of the word, must proceed under 
statutory or judicial authority. Even when both parties 
enter into it voluntarily, they must relinquish their freedom 
to a great extent by consenting in advance to accept the 
award of the arbitrators, so as to enable it to be judicially 
enforced. This gives it essentially the character of a court 
of law, with all its incidental antagonism and bitterness. 
If it have not these features, it is in reality conciliation, and 
not arbitration. 

As long as the present strained and opposing relations 
exist between capital and labor, disputes and controversies 
will be numerous and bitter. Any ostensible settlement of 
them by boards of arbitration will only be a brief truce, 
rather than a treaty of peace. Under the head of concilia- 
tion is included all that is v^oluntary, friendly, reasonable, 
and fair in its character ; and its possibilities for usefulness 
are great. Arbitration which must take account of the 
legal, opposing, and two-sided phases of a question, is well- 
nigh valueless for permanent results. There is much of the 
combative element in human nature ; and instead of stimu- 
lating it to greater activity, it should be counteracted and 
subdued by other qualities which are just as inherent in 
man's constitution. Only by such means can the different 
elements of society be united and harmonized. 



ECONOMIC LEGISLATION AND ITS 
PROPER LIMITS. 



" There shall be, in England, seven half-penny loaves sold for a 

penny : the three-hooped pot shall have ten hoops ; and I will make 

it felony to drink small beer.''"' 

King Heney VI. 

" O / it is excellent 

To have a gianVs strength; but it is tyrannous 

To use it like a giant.'''' 

Measure for Measure. 

" Let us a little permit Nature to take her own way ; she better 

understands her own affairs than we." 

Montaigne. 

" For ivhere''s the state beneath the firmament 
That doth excel the bees for government f " 

Du Bartas. 



XI. 

ECONOMIC LEGISLATION AND ITS PKOPER 
LIMITS. 

To what extent the State may properly interfere with 
the industrial freedom of its citizens is a difficult and 
many-sided question. We shall not attempt to answer it 
in detail, but rather indicate certain general principles 
dedueible from Natural Law, as a guide to its solution. 
The goal to be reached is the greatest good for the greatest 
number ; and natural principles are the finger-boards that 
point out the way. 

It is obvious that as modern civilization becomes more 
complex, population denser, and inventions and improve- 
ments more numerous, the scope of legislation, especially 
municipal, widens. The modern city, in many respects, 
is a great copartnership. Some sentimentalists hail muni- 
cipal drainage, water-works, lighting, and possible rapid 
transit as successive steps in socialism. They are, how- 
ever, only the wise business methods of a great corporation. 
Circumstances make them expedient, but their purpose is 
not to absorb private interests but to render them aid. 
The municipality can economically supply the citizen with 
water and light Avithout the least impairment of his per- 
sonal rights or privileges. With the growth of cities and 
profusion of inventions, an increasing number of functions 
can be performed by public administration. This is espe- 
cially true, where, in services like those before mentioned, 
unlimited private competition is not practicable. The sup- 
ply of water and light in a municipality involves the use 

123 



•124 THE POLITICAL ECONOMY OF NATURAL LAAT. 

of tile public streets, which, makes it a local, natural monop- 
oly. Therefore, if not owned by the city, it must at least 
be regulated by it. 

But any enlargement of public functions within the 
limit of practical private management increases opportuni- 
ties for official waste, political corruption, rings, and spoils, 
with all their incidental demoralization. If the average 
city alderman and councilman were thoroughly expert and 
also conscientious and incorruiDtible, the question would be 
considerably modified. Even within its present limits the 
public service in most cities is shamefully defective. 

As fundamental principles we may conclude first, that 
the State should not interfere in any enterprise that may 
be as efficiently carried on by private control ; and second, 
that it should leave all questions of prices, rates, wages, and 
hours, to the natural regulation of free and untrammelled 
conditions. 

Under the first of these propositions, let us note a few 
of the disadvantages of governmental management as com- 
pared with that of individuals or private corporations. 

Many examples will occur to the mind of an impartial 
inquirer, showing the superior excellence and frugality of 
private administration over municipal. State, or national. 
The advantage is apparent, and usually involves not only 
cost, but efficiency and thoroughness in management and 
execution. For example, the public buildings of the 
United States, built by governmental or political organiza- 
tions, on an average have cost vastly more than if erected 
under private management. It does not follow that this 
difference is always the result of dishonesty or mismanage- 
ment. It is in the nature of things ; or, in other words, in 
accordance with Natural Law. The more close and direct 
the connection between the investor and the investment, 
the greater will be the economy and efficiency ; and the 
more indirect and remote from the contributor or tax -payer 



ECONOMIC LEGISLATION AND ITS PROPER LIMITS. 125 

the expenditure, the greater will be the "vvaste, mismanage- 
ment, and extravagance. It would seem that those persons 
Avho are advocating governmental management for railroads 
and telegraphs must be blind to these laws, and to the 
teaching of experience. Take a great railroad system, the 
successful management of which requires the highest grade 
of executive talent, put it under the control of politicians 
of the dominant party, and the result may be easily ima- 
gined. In proportion as the domain of State administra- 
tion is widened, the amount of " spoils," already too large, 
is increased ; and these would be fought over under such a 
plan by politicians after every election. Divorce politics 
from any industrial enterprise, and a long step is taken in 
the direction of doing business on business principles. In 
the face of these undeniable facts, is it not strange that 
intelligent men urge, with evident sincerity, that the incu- 
bus of national and jiolitical control be fastened upon many 
kinds of business now efficiently conducted by private and 
corporate administration ? It is evident that demagogism 
is the real foundation of many efforts in this direction. It 
is expected, as a matter of course, that when a city hall, 
court house, State house, or custom house is built, the ex- 
pense will be much greater, and the utility less, than 
would be the case if the same were done by private enter- 
prise. Official methods are extravagant, and operations 
under them are so hampered by " red tape " that they 
lack directness and efficiency. Eings, combinations, and 
favoritism are incidental to all such transactions. The 
opportunity for these abuses is much greater under our 
democratic form of government than with the nations of 
the Old World, whose powers are more centralized. There 
the civil service is more a matter of business and less of 
politics, and the administration of affairs is not continually 
changing. The necessary sphere of such governmental 
action among us is limited to those enterprises which, from 



126 THE POLITICAL ECONOMY OP NATURAL LAW. 

$ 

tlieir public nature, are beyond private control. In general, 
the rule of laisser /aire has been tlie policy of our govern- 
ment in the past, and under it we have greatly prospered. 
The threatening evil of the present time is excessive eco- 
nomic regulation. 

The second department of detrimental legislation named 
consists in the efforts to fix prices and rates, which in the 
end must inevitably be regulated by the law of supply and 
demand. This means a conflict between legislative and 
natural law. It may at first appear that some legislation 
of this kind would be beneficial, especially as applied to 
railroads. Whether or not correctly, the courts have de- 
cided in favor of the legality of State and national regula- 
tion of the rates of freight and passenger service. As this 
decision must be accepted, the only question remaining is 
that of expediency. It is urged that railroads are public 
highways, and that they have special privileges granted by 
their charters ; and for these reasons they should be subject 
to governmental control. Quite an extensive test of this 
policy was made, a few years since, by the enactment, in a 
few of the western States, of what were known as " granger 
laws." Experience has shown that these laws were not 
only useless, but an injury to the public. It was only 
another of the oft-repeated attempts to substitute the arti- 
ficial for the natural. Without State interference, business 
policy and competition are each constantly forcing the rates 
for service towards the normal standard, or to such a point 
as is natural and fair. Take, for instance, the worst sup- 
posable case, — that of a road without any apparent compe- 
tition, either by land or water. The popular estimate of 
such a road is that it is a perfect " monopoly," and that its 
policy and interest will naturally cause it to make a tariff 
of high rates. A more careful examination of the case will 
show that it is against the true financial policy of even 
such a road to establish its rates above a fair standard. 



ECONOlVnC LEGISLATION AND ITS PKOPER LIMITS. 127 

Normal rates attract, foster, and increase both business and 
profits. Sucli a road, to be profitable, must adopt a policy 
that Avill encourage the location of manufactures, the devel- 
opment of agricvilture, and the thorough settlement of the 
tributary territory. Sagacious railroad managers are learn- 
ing that a large business at normal rates is far more profita- 
ble than a restricted traffic under a liigh tariff. In other 
words, they cannot afford to fix rates above the normal any 
more than below it. It is no doubt true that the managers 
of many roads have not fully realized the application of 
this general law ; but as both experience and observation 
are persistent teachers, the tendency is constantly in the 
direction of a normal standard. In numerous instances, 
roads have voluntarily reduced their rates, thereby realiz- 
ing as a direct result an increase of business and profits. 
As equipments and appliances have become more perfect, 
natural rates have steadily declined, and will continue to 
do so, regardless of legislation. Every reduction brings a 
great and unexpected increase of business. The problem 
before every railroad manager is to find as nearly as possi- 
ble the normal basis ; for in the end, that is the most prof- 
itable. In proportion as tariffs are removed from it, either 
above or below, profits decrease. Artificial restrictions pre- 
vent the increase of competition and discourage the build- 
ing of new roads, as some of the "granger States" found 
to their sorrow, after the adoption of their "cast-iron" 
regulations. 

About fifty years ago, "assize laws" were enacted in 
New York and some other cities, regulating the price and 
weight of loaves of bread, based on the price of flour. 
After a trial, which was attended Avith much trouble and 
expense, in consequence of the necessity for numerous in- 
spectors, the laws were repealed. Besides the saving of 
expense, it was found that natural comj^etition between 
bakers was much more efi^ectual. 



128 THE POLITICAL ECONOMY OF NATURAL LAW. 

The old usury laws furuisli anotlier notable example of 
attempts to fix artificial prices. They were more of an 
injury to the borrower than to the lender. As well regu- 
late the height of the tides by statute. When the artificial 
comes squarely in conflict with the natural, the latter will, 
sooner or later, surely triumph. 

A striking instance of misapplied legislation is seen in 
statutes, existing and proposed, to regulate the hours of 
labor. These hare been advocated and urged by so-called 
labor reformers and by labor organizations. They have 
brought a very strong pressure to bear on legislators in 
favor of these measures. When we look beneath the sur- 
face, and see their real effect, we can only be surprised that 
working-men are so blind to their own interests. Time is 
the one thing that all share alike. Unlike nearly every- 
thing else, the poor have the same amount as the rich. It 
is, in fact, the capital of the laboring man. By Natural 
Law, he has his full time to dispose of as he may think 
best. But when he asks for an artificial law, which forcibly, 
under all circumstances, will deprive him of the use of 
a portion of his own productive power, as by an " eight- 
hour law," he diminishes by so much his available reserve 
and renders himself poorer. This is the real sum and sub- 
stance of restrictive legislation regarding hours of labor, 
whenever applied to adults. How unfortunate that Amer- 
ican citizens should be so blind to their own interests as 
to deliberately beg to have their liberty and capital taken 
from them ! If legal enactments be needed to prevent 
men from selling their time when they wish, it would logi- 
cally follow that the State should control their eating and 
drinking, and prescribe their wearing apparel. It is a 
reflection upon the intelligence of the masses of the people 
to suppose that we have any considerable number of adult 
citizens who are so ignorant that they cannot decide for 
themselves how much to work. Moreover, if their physical 



ECONOMIC LEGISLATION AXD ITS PliOPER LIMITS. 129 

welfare were promoted by shorter liours the decision should 
be voluntary. If the eight-hour law prevailed here and 
not in European countries, our manufacturers could not 
compete with theirs in the markets of the world. More 
workmen, too, would be attracted to our shores in hopes of 
an easier time. And both these causes would force down 
wages. 

Legislation in regard to the frequency of payment of 
wages is clearly superfluous, though perhaps harmless, ex- 
cept as a precedent. Every unnecessary enactment decreases 
the respect for law, and lowers the estimation of its justice 
and impartiality. 

The general demand for the widening of legislative 
functions arises, doubtless, from a vague though baseless 
idea that, by some additional enactments, evils which really 
come from defective character can be corrected by the 
magic of legislation. For this reason, an effort is made to 
correct every petty grievance by additional law-making. 
Prosperity is expected through some legal panacea, instead 
of by economy and industry. The present time is prolific 
of those so-called j)olitical economists who advocate new 
and unique additions to our already overburdened code. 
Ignorance of the first principles of political science can 
only give rise to such visionary theories. The " reformers " 
assume that all employers are blindly selfish, and wish to 
lengthen hours and depress wages. On the contrary, it is 
for the interest of every employer to pay good wages and 
make as short hours as competition and the nature of the 
business will warrant. Only by such a course can he retain 
his best help and get the highest quality of production. 

Business prospers in the absence of legal interference, 
except to simply provide for justice and freedom. 

It is true that the complex arrangements of modern 
civilization require State intervention in some ways un- 
necessary under more primitive conditions. The factory 



130 THE POLITICAL ECONOMY OF NATURAL LAW. 

legislation of England, and similar enactments in some of 
our States, are examples. An excess of liberty to some 
individuals ma}^ prove a tyranny to others. As tlie good 
of society is more important than the possible advantage 
of one of its fractional parts, the operations of the few 
must be restricted when they encroach upon the liberty of 
the many. In other words, the natural law of liberty, as 
applied to society, is higher than that pertaining to the 
individual ; and while they are not in opposition, the lower 
is modified by it. Thus human law should indorse and 
supplement Natural Law by restricting private will when 
it conflicts with the will of society. This is compatible 
with the greatest average freedom for all. The primary 
obligation of the State is in the exercise of what are 
usually known as police powers. There are a variety of 
other functions more or less intimately connected with 
these duties of protection to person and property. We ex- 
pect the State to enforce our contracts, regulate our sani- 
tary conditions, prevent and punish frauds, abate nuisances, 
and ward of£ general evils so far as is possible. 

Among the examples of factory legislation which seem 
wise and proper is State interference in behalf of children 
whose parents or guardians, through motives of cupidity, 
will not protect them from overwork. The same restric- 
tions in regard to an adult would be superfluous, for he is 
responsible and supposed to be able to judge correctly as to 
what is best for himself. Besides, if he be restricted in 
hours, it might mean for him less food and clothing and a 
poorer home. Wholesome regulations relating to fire- 
escapes, sanitary inspection, totil air, the fencing of dan- 
gerous machinery and elevator wells, are proper and 
necessary. They encroach upon no man's liberty, and 
private enterprise cannot always be relied upon to regulate 
them. Individual cupidity and neglect must be controlled 
by public supervision. Personal will must be subservient 



ECONOMIC LEGISLATION AND ITS PKOPER LIMITS. 131 

to collective will. Individual freedom might lead to the 
location of a powder-mill or a glue factory in a thickly- 
settled street, unless it were restrained by collective free- 
dom. It is obviously within the province of the State to 
appoint boards of health, and sanitary inspectors, whose 
duties shall include the supression of contagious and epi- 
demic diseases, and the protection of air and water from 
pollution and contagion. As it is impossible for individuals 
to be universal experts, it is also necessary to have govern- 
ment inspectors to test weights and measures, to detect 
adulterations in foods and chemicals, and also, in some 
cases, to brand those articles of commerce whose quality or 
quantity cannot be verified by ordinary observation. Organ- 
ized government has the power to aid and supplement the 
wisdom of the individual, without in any way restricting his 
independence, or deadening the competitive and elastic forces 
of the business world. The boundary line between State in- 
tervention and individual enterprise must, to a certain ex- 
tent, be determined by a wise expediency ; but the great end 
to be sought is, that private enterprise and competition shall 
be left unhampered. Any unnecessary dependence on the 
government for objects obtainable by private efforts is so 
clearly a violation of Natural Law that bad results are sure 
to follow. 



DEPENDENCE AND POVERTY. 



" Practise yourself, for Heaven'' s sake, in little things ; and thence 
proceed to greater.''^ 

Epictetus. 

" Honor and shame from no condition rise; 
Act ivell your 2^ art, there all the honor liesy 

Pope. 



The poor always ye have with you.'''' 

JoHx xii. 8. 



" Teach every man to spurn the rage of gain; 
Teach him that states of native strength possessed, 
Though very poor, may still be very 6?ess'cZ." 

Goldsmith. 

" To a close-shorn sheep God gives wind by measure.''^ 
''^ Help thyself and God will help thee.'" 



" The poor must be wisely visited and liberally cared for, so that 
mendicity shall not be tempted into mendacity, nor want exasperated 
into crime.'''' 

KOBERT C. WiNTHKOP. 

" Let not thy mind run on that thou lackest as much as on what 

thou hast already.'''' 

Marcus Aurelius. 

" There is nothing either good or bad, but thinking makes it so.''^ 

Shakespeare. 

"Blessed is he that considereth the poor.''"' 

Psalm xli. 1. 



XII. 

DEPENDENCE AND POVEETY. 

The terrible degradation, vice, and poverty which pre- 
vail, especially in the slums of our large cities, furnish a 
difficult social problem for solution. That the vast ma- 
jority of the victims of these conditions is composed of 
the unassimilated alien element is well known. But racial 
differences alone do not account for the great contrast. 
The native citizen has a much greater inborn independence 
of character. He may be equally poor and uneducated, but 
he will put forth herculean efforts to avoid falling into a 
condition of dependency. For generations he has been self- 
reliant and self-respecting. On the contrary, the traditional 
paternalism of European monarchies is reflected in the char- 
acter of the immigrant. He has looked upon his govern- 
ment as an institution to lean upon, and it is difficult for 
him to grasp the spirit of Americanism. Thus a certain 
proportion of foreign immigrants, without much resistance 
on their own part, settle down into low physical, mental, 
and moral conditions. Their specific gravity is weak. 

While no graphic descriptions of the deplorable condi- 
tions existing in our very midst can equal the reality, there 
is a deeper question involved, as to the effect and utility of 
holding such delineations continually in the public gaze. 
Many well-meaning and conscientious philanthropists have 
given us volumes of appalling detail of the " social cellar," 
hoping thereby to arouse ])ublic sentiment so that some 
radical and effective remedial measures would be inaugu- 

135 



136 THE POLITICAL ECONOMY OF NATURAL LAW. 

rated. Lacking, as they do, a full recognition of law, these 
writers work in the illusive light of a mistaken mental 
philosophy. Instead of arousing the public mind they 
harden it. The human mentality is so constituted that the 
iteration and reiteration of these " tales of woe " finally 
cause the things depicted to be taken as a matter of course. 
Instead of being regarded as abnormal conditions to be 
cured, they come to be accepted as inevitable and hopeless. 
The real, though by no means the intended influence of 
these graphic pictures of the nether side of humanity, is 
pessimistic and discouraging. To magnify abuses until 
they seem to be the rule, is to promote them. In varying 
form the old question of realism versus idealism is ever 
cropping out. Shall the worst or the best be made of exist- 
ing conditions ? We take direct issue with the host of 
noble men and women who, with the best of intentions and 
with artistic skill, have draAvn, framed, and hung up vivid 
pictures of human misery. Pessimistic realism contains 
no element of cure. Such has been the conventional and 
largely the ecclesiastical way of dealing with evil, moral 
and social, for centuries, and little advance has been 
made. It has been thought that to hold up the abnormal, 
turn it about in the light and analyze it, would effectually 
make it detestable. It has rather made it familiar and 
expected. The invisible powers of thought and suggestion, 
of which the great majority are unconscious, are active in 
sociology as elsewhere. It may be thought to be outside 
the scope of this study, but it is nevertheless true that by 
psychological law, conditions which are widely lodged and 
spread out in the public mind tend to externally actualize 
themselves. There is almost such a process as thinking 
things into existence, and this most of all when they are 
not wanted. The more the animalism of mankind is put 
on exhibition, the more its corresponding unisons vibrate 
within. The same principle is seen in politics. The gen- 



DEPENDENCE AND POVERTY. 137 

eral suspicion and assumption of motives of self-seeking 
which are focused upon every one in political life is appall- 
ing. Ko difference how conscientious a man may be, a 
deluge of low insinuations is poured upon him. Is patri- 
otism dead ? If not, it survives in spite of those who see 
the worst in every man, thing, and system. 

You would not wish your family to frequent the slums 
in real life, and if so, it is better not to do it in books. 
Pope's familiar lines regarding " vice " contain the germs 
of a whole system of philosophy. Shall all, then, avoid 
the slums for fear of contamination ? Exactly the reverse 
in the case of every one who will go with any intelligent 
aid. Let those go who are able to discover there a little 
that is good for a foundation. There is a trace of whole- 
someness everywhere ; and where there is a minimum, it is 
of the highest importance that that little be recognized, 
stimulated, and made the basis of more. The slums are 
already dark Avith pessimism, and require nothing so much 
as a flood of optimism. They need cheer and hope. Con- 
dolence and sentimental sympathy so profusely offered 
should be replaced by encouragement. Emphasize the one 
talent they have, and this will bring five or ten into mani- 
festation. 

The pessimist has eyes only for the worst, and his pres- 
ence is a black pall. The scientific way to cope with nega- 
tive conditions is to displace them with positives. To hold 
up before any one his degradation, poverty, or ignorance, 
is to impress them more deeply upon him. The inhabitants 
of the slums need hope as much as food or fuel ; in fact, 
the very lack of it is mainly responsible for their present 
condition. Every unfortunate has at least some small solid 
spot to build from. 

There are still a few healthful germs in the darkness of 
the social cellar, and sunshine, air, and cultivation will 
make them sprout and grow. As the oak lies enwrapped 



188 THE POLITICAL ECOKOMY OE NATURAL LAW. 

in the acorn, so ideal possibilities are latent in all sorts and 
conditions of men. In the light of evolution, low grades 
are only such relatively. 

In proportion as mind becomes pure and wholesome, hab- 
itations and environment are transformed as a resultant 
correspondence. Moral, social, economic, and hygienic edu- 
cation in individual character is the urgent necessity. If, 
without these, tlie population of the slums of New York 
were moved into the palaces of Fifth Avenue, the improve- 
ment would be more superficial than real. Model houses 
for the poor are good, but their faultless qualities can be 
maintained only from within. The charity demanded by 
the times is not so much an infusion of dollars as of moral 
and industrial training, together with the insiDiration of 
hope, ambition, and independence. This necessity is be- 
coming widely recognized ; and university settlements, in- 
dustrial, technical, and cooking schools, kindergartens and 
missions, are being multiplied. While pessimism paralyzes, 
optimism gives new life. Charity is being more intelli- 
gently administered and becoming more true to the name. 
The almsgiving of the past has largely been contrary to 
Natural Law and often worse than useless. 

Turning from the slums to the broader applications of 
Charity, the great need is a scientific, rather than a senti- 
mental basis. The laws of dependence are as exact as those 
of chemistry. The charitable societies of London are far 
more numerous and wealthy than those of any other city, 
and no where else is there such a vast amount of abject and 
hopeless poverty. What is the relation of these two facts ; 
or, in other words, which is the cause and which effect ? 
If we study human nature in the light of Natural Law for 
the solution of this problem, and also observe carefully the 
teaching of experience, we find that supply and demand 
equal each other here, as in the domain of commerce. Let 
the supplies of charity be doubled or quadrupled, and the 



DEPENDENCE AND POVERTY. 139 

demand from dependence keeps pace witli them. These 
relations and sequences, being uniform, prove that they are 
not a matter of chance, but rather are governed by natural 
and unvarying principles. As rapidly as dependence can 
hnd something to depend upon, it will increase. In con- 
trast with London is Paris, where racial conditions and 
customs would lead us to expect more and worse poverty. 
There is instead much less, and of a milder variety. The 
French capital makes but a moderate showing in charitable 
organizations when compared with London, where the num- 
ber of old and thoroughly equipped benevolent associations 
is remarkable. These illustrations, and similar ones which 
might be cited, do not prove that charity is an evil. It is 
misapplied charity, which is really not charity at all, of 
Avhich the world has been full, that is out of harmony with 
natural principles. 

Charity is divine, heaven-born, the brightest and noblest 
of all virtues ; but this does not alter the fact that so-called 
charity, misapplied, breeds dependence with unerring cer- 
tainty. 

The diseased, aged, and helpless are within its sphere, 
and he who has surplus wealth gets real sweetness out of it 
by applying it to lessen the misery and lighten the burdens 
of this ever-present class. Natural Law is not uncharitable 
nor mechanical, as some might hastily conclude ; but com- 
passionate and bountiful, when not transgressed and delied. 
Benevolence is normal, and the hospitals, asylums, and other 
humane institutions are entitled not only to our merciful 
regard, but we owe them a debt. Charity is a natural qual- 
ity, and it would be unnatural not to exercise it. It is, 
perhaps, fortunate for society that it has its helpless and 
dependent class, for it furnishes an ample field for the 
exercise of the kindly and brotherly motives of man's nature. 
While all these facts cannot be too greatly emphasized, it 
remains true that every man who has in him the possibili- 



140 THE POLITICAL ECONOINIY OF NATURAL LAW. 

ties of independence, is degraded by opportunities to lean 
upon anytliing outside of liimself. The contrast is the wid- 
est possible between the results of charity exercised in its 
true sphere, and those of its abuse, or when applied outside 
of its legitimate functions. 

The so-called paternal governments of Europe have in 
them elements which tend directly to add to the numbers 
and degradation of the dependent classes, and to make their 
condition more hopeless and iixed in its character. It is 
just as demoralizing and destructive to a self-reliant man- 
hood to lean upon the State, as upon some private organiza- 
tion. A government that upholds the rule of laisser faire, 
or non-interference, is that under which true manhood and 
independence are best developed and cultivated. 

Mrs. James T. Melds, in her admirable book, " How to 
help the Poor," says : — 

" To teach the poor how to use even the small share of goods and 
talents intrusted to them proves to be almost the only true help of a 
worldly sort which it is possible to give them. Other gifts, through 
the long ages tried and found wanting, we must have done with. 
Nearly a million of dollars, in public and private charities, have been 
given away in one year in Boston alone; and this large sum has 
brought, by way of return, a more fixed body of persons who live 
upon the expectation of public assistance, and whose degradation 
becomes daily deeper. The truth has been made clear to us that 
expenditiue of money and goods alone does not alleviate poverty." 

A sharp line of demarcation needs to be drawn between 
a poor man and a pauper. There is little necessary resem- 
blance between poverty and pauperism. The worst calam- 
ity that can befall a poor man is to become pauperized. 
He who blindly scatters money in the name of charity is 
liable to do incalculable harm. On the other hand, he who 
teaches one how to help himself, and raises him from the 
dependent class into that which is thrifty, does society and 
humanity a great favor. No person of means can discharge 



DEPENDENCE AND POVERTY. 141 

his obligations to society by careless and indiscriminate 
giving. Industrial schools, and any other aids that teach 
the Avay of self-support, and give the young such a training 
as will put them on their feet, deserve the most liberal sup- 
port and encouragement. Help some dependant to discover 
a path of self-support ; for by this act of real charity you 
bring him into harmony with Natural Law, and no gift of 
money could equal that favor. The knowledge of something 
to fall back upon in the future, outside of one's own exer- 
tion, causes improvidence in the present. The tramp who 
knows that charity and the soup-house are in readiness for 
him Avhen winter comes, will not put forth much effort to 
find employment during the summer and autumn. 

It is not within the province of this book to present 
statistics to j^rove how much the dependent and pauperized 
classes are increased by intemperance, vice, and crime. 
That these, however, are the true causes of nine-tenths of 
the poverty, misery, and degradation is evident to any 
candid observer. It is idle and fallacious to attribute evils 
due to these causes to any inherent fairlt of our social 
system. 



SOCIALISM AS A POLITICAL SYSTEM. 



'■^Knowledge is the only fountain both of the love and the princi- 
ples of human liberty.''^ 



Webster. 



" Where law ends, tyranny begins.''^ 

Wjr. Pitt. 



" Of what avail the plough and sail, 
Or land or life, if freedom fail f'' 

Emerson. 

^^ Liberty ! Liberty! how many crimes are committed in thy 

name .'" 

Madam K Roland. 

^^ Man is not the creature of circumstances. Circumstances are 

the creatures of men.'''' 

Disraeli. 

" Sail on, Ship of State ! 
Sail on, Union, strong and great! 
Humanity loith all its fears, 
With all the hoj^es of future years. 
Is hanging breathless on thy fate ! " 

The Building of the Ship. 



XIII. 
SOCIALISM AS A POLITICAL SYSTEM. 

There are few terms in common nse so elastic in defini- 
tion, and which signify so many different things to different 
minds, as socialism. In its root meaning and derivation, it 
is both harmless and attractive. To be social is creditable. 
It carries the idea of friendliness, companionship, brother- 
hood, neighborly interest, and even nnsellishness. These 
are some of the ideal qualities of humanity, and it is impos- 
sible to over-estimate their importance and beauty. If 
socialism promised their general embodiment, it would be 
supremely desirable and could not come too soon. There 
are some philanthropists who call themselves " socialistic," 
and persuade themselves that, in some way, the government 
can take hold of the matter and speedily usher in the reign 
of these delightful conditions. There are sentimental cler- 
gymen, who look upon business from the outside, and know 
little of its inherent self-regulative and compensatory laws, 
who wish to see a New Order, from the fact that they are 
unable to discriminate between the present natural system 
and its abuses. They forget that everything normal has its 
negatives and violations. There are " Christian Socialists " 
who are unmindful that He whom they regard as their per- 
fect and complete INIodel labored entirely within the domain 
of human life and character, and not at all in external 
political affairs, which, in their very nature, are only expres- 
sive and resultant. 

Some enthusiastic theorists hail every little widening of 
state or municipal functions — made necessary by advan- 

145 



146 THE POLITICAL ECONOMY OF NATURAL LAW. 

cing civilization — as " socialistic," and harbor the pleasant 
illusion that society is shortly to be reconstructed by a 
short-cut process. But the beautiful social qualities before 
enumerated are not political, but moral and personal. Their 
location is in the individual, and their exercise comes 
through voluntary growth and unfoldment. 

Yielding to no one in our admiration for socialistic qual- 
ities in moral character, socialisvi is here considered as a 
political system. This is its claim, and there is no other 
logical method. The accepted definition of the term in- 
volves the fundamental political reconstruction of society. 
Any such radical change must necessarily be coercive and 
not evolutionary. Socialism, as a system, means not 
merely a friendly interest in our neighbor's welfare, but a 
formal and forcible one. Instead of natural liberty, it sig- 
nifies artificial interference, even though imposed in the 
name of brotherhood. It would ignore inherent, elastic, 
self-regulative forces, which are omnipresent, and prescribe 
everything by mechanical metes and bounds. Ignoring 
spontaneous individual growth, it would furnish universal 
moulds casting all shapes in stiff and arbitrary form. 

Socialism, as a possible political framework, is not only 
fatal to all evolutionary social development, but is para- 
lyzing to all ideal human brotherhood. If it were possible 
to make men altruistic by legislation, all its sweetness 
would vanish with the loss of its voluntary and spontaneous 
spirit. But legislation piled Ossa on Pelion will not change 
human character. As well galvanize a decaying body into 
youthful vigor as to inspire brotherly love, or even morality, 
by coercive legalism. As properly call a stick of timber a 
tree, as to denominate political socialism brotherhood. A 
" whited sepulchre " is a sepulchre still. Were it possible 
to put in motion an entire paraphernalia of outward bal- 
ances, checks, weights, and measures, living benevolence 
and unselfish service would become extinct. 



SOCIALISM AS A POLITICAL SYSTEM. 147 

A non-recognition of the self-regulative and educational 
forces of Natural Law, everywhere present, leads many to 
conclude that there is but one way to get rid of injustice, 
and tliat is to pass legal enactments against it. It is like 
building a dam across a stream. As the water behind it 
rises they would build it higher, and patch it here and brace 
it there. But if it be not swept away, the current, in full 
volume, soon floAvs over it. j\Iistaking abnormities, which 
come from human distortion, for normality, they would 
raise an artificial wall to forever stop the rising flood of 
evils. 

Legislation is invoked to cure all the ills " that flesh is 
heir to." Is there injustice ? let us make a law against it. 
Are hours too long ? shorten them by law. Is there too 
much competition ? put it down by law. Are there trusts ? 
wipe them out by law. Are times hard ? improve them by 
law. Is money tight ? make more by law. Is the millen- 
nium slow in coming ? invoke the law. An able writer, in 
a recent article, characterizes the proposed phenomenal 
legislation as the modern tower of Babel. He says : — 

"And now there comes a band of earnest men and women who 
see plainly the evils of the times, and who would give up much to 
help their fellow-men. ' Come brothers,' they say, ' let us be brothers 
indeed. We will make a tremendous, a sky-reaching, an all-power- 
ful law, that all men are and shall be brothers ; that no one shall 
have more of this world's goods than another; that each shall give 
his best work and his best endeavors for the common good of all. 
We will all work for the Government, and the Government will feed 
us all. We will have no more poverty and no more riches, but all 
shall work and eat at the nation's table, and none shall be kept back 
in idleness or go away in hunger.' This is the plan of the Nation- 
alist. It is the loftiest structure of its kind that the mind of man 
ever sought to rear; for socialism thinks to outwit Mother Nature 
herself, and to legislate the law of the survival of the fittest off the 
face of the earth. It is the modern tower of Babel. But it is not to 
be built of bricks, but of men ; and the mortar of legislation never 



148 THE POLITICAL ECOJSTOMY OF NATURAL LAW. 

can make a man stay put, Tlie law of evolution is superior to tlie 
laws of men. Before man was, it was, and yet, like the Babel 
builders of old, he thinks to overtop it." 

As a moying body seeks tlie line of least resistance, the 
average man will make a living with, as little exertion as 
possible. Mne times out of ten, as has often been demon- 
strated, if he were in the man's shoes whom he regards as 
an " oppressor," he would be the harder man of the two. 
What every live man needs is not more law but less. He 
wants natural freedom, consistent with the freedom of 
others, and has no use for arbitrary trammels. 

The two wings of the socialistic propaganda are very 
unlike. At one extreme is a small band of earnest souls, 
sincere and benevolent, though impractical. They are 
filled with a fraternal spirit themselves and wish every one 
else to be. But under the same banner, though ten times 
as numerous, are those to whom socialism means, not more 
fraternity, but a grand divide. Avarice and envy are covert 
elements in human character which sway men powerfully, 
even though often unconsciously. The vast majority of 
socialists whose ranks shade through different degrees into 
red anarchism, gather encouragement and strength from the 
little section of sentimentalists who comprise the wing that 
is in sight and does the theorizing. The crowded social- 
istic columns that loom up in the dark background are look- 
ing forward to the time, when, through the forms of law, 
the estates of the more thrifty may be confiscated, which 
they imagine will give them governmental support and an 
easy time. 

It is idle to claim that the ignorant and unassimilated 
alien elements which form the great bulk of the socialistic 
party of America are actuated by a fraternal or unselfish 
spirit. Their lurid declamations against property and cap- 
ital, and the spirit, even of their best literature, are conclu- 
sive on this point. Their prevailing animus is distinctly 



SOCIALISM AS A POLITICAL SYSTEM. 149 

destructive and not constructive. When the French Revo- 
lution was kindled, the theory was " Liberty, Equality, and 
Fraternity." In practice, it turned out to be, tyranny, 
cruelty, and destruction. 

Were it possible to inaugurate political socialism even 
without violence, it would smother personal ambition and 
liberty, and discourage progress. As is now the case with 
penitentiary labor, the minimum would speedily become 
the maximum. As a practical result, consumption would 
soon overtake and pass production, including the reserves 
of previous accumidation. Then would follow famine, civil 
war, and anarchy, and the whole artificial conglomeration 
would fall to pieces from its own confusion and corruption. 
Brute force and chaos would prevail, until, at last, the few 
survivors would have again to make a new beginning on 
natural principles. But complacent theorists say, "we 
shall accomplish it through evolution without revolution." 
But if it is a good and desirable condition, the sooner it 
comes the better, and such is the reasoning of their impa- 
tient followers. In this way gigantic but irresponsible 
forces are directly stimulated. 

Socialistic agitators descant upon "wage-slavery," but 
that is nothing compared with a coercion which would 
sweep away all liberty. The employer — and the vast ma- 
jority of employers are not rich — is a "slave" to the 
markets, as much as the wage-earner is to his toil, and often 
more, for he cannot so easily change his position. It would 
indeed be slavery to have eating, sleeping, clothing, work- 
ing, and all the social and personal activities conducted 
upon the compulsory plan, in which each is assigned his 
place by the " majority," which would really consist of a 
few ofiicial dictators. The blotting out of individual liberty 
would mean real slavery. There would be no incentive for 
personal effort, such as is now afforded by the hope of pro- 
viding for infirmity or old age, or for the wants of family 



150 THE POLITICAL ECONOMY OF NATURAL LAW. 

and kindred. The fruits of a man's industry would belong to 
" The State." The choice of occupation would be dictated 
by the of6.ce-holders of the dominant party. 

The mild socialistic theorist is like a man who is unwit- 
tingly playing with fire in the midst of a wilderness of 
inflammable material. While he is innocently dreaming 
of coming fraternity he is unconsciously though forcibly 
appealing to some of the strongest and lowest passions in 
mankind. These propensities are wholly on the material or 
animal plane. Political and coercive socialism is thoroughly 
materialistic. It minimizes character and manhood, and 
magnifies the value of externals. When the theoretical 
socialist indulges in exaggeration about the unequal distri- 
bution of wealth, as attributable to the 2^^'esent order, he 
directly appeals to the envy and avarice of the ignorant 
and selfish. They are made to believe that the reason why 
they have not as much wealth as some one else is because 
they have not had their rights. Socialism is no question of 
the poor against the rich. It would be as disastrous to the 
former as to the latter. It is a question of thrift, industry, 
economy, and character, against dependence, shiftlessness, 
and avarice. It would prostrate individuality instead of 
placing it upon its feet. 

There are marked inequalities among men and else- 
where, and there will be until the law of evolution is 
repealed and the universe reconstructed. But the divine 
order provides that those who are most advanced shall be 
an aid and inspiration to those who are in the rear. The 
spirit of a voluntary and altruistic brotherhood was never 
before so active, and nothing but a cold and selfish legalism 
can chill it. The overflow of charities, aids, and helps is 
rising in volume. Men are recognizing a racial unity, even 
though it be made up of diversity. Voluntary virtue grows 
and glows in profusion and purity, but a coercive element 
introduces formal legalism and coldness. There always have 



SOCIALISM AS A POLITICAL SYSTEM. 151 

been, and will be, leaders and followers in knowledge, power, 
wealth, invention, science, and philosophy, and the world 
would be in a sad condition if all were levelled down to a 
dead common-place. The " fittest " portray the possibilities 
and inspire the ambition of the less fit. Such is the law of 
growth which always progresses from within. The hostil- 
ity that is being worked up against honorable accumulation, 
upon the theory that '• property is robbery," is an outcrop- 
ping of barbarism and an invitation to return to it. The 
proposed legislation of some of the trans-Mississippi States 
would lead one to suppose that capital is not only not to be 
invited, but something to be kept out. 

The present labor-value product of a manual workman, 
as measured in comfort and luxuries, is about three times 
what it was forty years ago. The advance has been natural 
and healthful, and will be continuous under normal condi- 
tions. This represents the advance of a class, but in Amer- 
ica individuals are not bound to a class. Those who are self- 
fitted leave it behind. It is preposterous to make "the 
social system " the pack-horse for the huge load of nega- 
tions, sins, and weaknesses that inhere in ignorance and 
imbecility. 

Through the rosy vision of the theorist, " The State " — 
which is the all-comprehensive agency in socialism — will 
be a perfect, omnipresent, and omnipotent instrumentality, 
able not only to cognize every detail, but to control univer- 
sal equity and righteousness. But the real State would be 
composed of office-holding politicians. With tenfold greater 
opportunities than present conditions afford, the probable 
reign of dictation, jobbery, and favoritism may be faintly 
imagined. 

It is foreign to our purpose to attempt any historical or 
detailed study of voluntary local socialistic experiments 
which have been made. Though differing somewhat in 
doctrine, they have positive features in common, which 
are visionary and abnormal. 



152 THE POLITICAL ECONOMY OF NATURAL LAW. 

At one period in his career, Horace Greeley gave local 
voluntary communism an earnest investigation. His opin- 
ion was formed after close and practical observation. He 
says : — 

" Along with many noble and lofty souls, whose impulses are 
pm-ely philanthropic, and who are willing to labor and suffer reproach 
for any cause that promises to benefit mankind, there throng scores 
of whom the world is quite worthy, — the conceited, the crochety, 
the selfish, the headstrong, the pugnacious, the unappreciated, the 
played-out, the idle, and the good-for-nothing generally; who, find- 
ing themselves utterly out of place and at a discoimt in the world 
as it is, rashly conclude that they are exactly fitted for the world as 
it ought to be." 

Socialism is not indigenous to American soil, and is an 
exotic in any country where free and constitutional govern- 
ment prevails, though it assumes to oppose despotism. As 
by jSTatural La^v extremes meet, so violent or compulsory 
socialism becomes itself despotism. Its apostles and advo- 
cates are not numerous among native American citizens, or 
even among those of foreign birth who have any intelligent 
appreciation of our political system. These irreconcilable 
extremists are willing to ingulf society, themselves included, 
in general ruin, and to relapse into consequent barbarism, 
rather than that existing civilization and government should 
continue. That they gather moral encouragement from 
milder socialists, some of whom advocate the same end, 
but hope to bring it about by peaceful means, is beyond a 
doubt. The pronounced sentimentalism of the times, "which 
is making such efforts to set aside natural principles, is, 
though perhaps unwittingly, lending encouragement in the 
same direction. The warfare against Natural Law is car- 
ried on by an army of allies whose several motives and aims 
greatly vary, but in this general hostility they are a unit. 

Experience, as before noted, which is the indorser of 



SOCIALISM AS A POLITICAL SYSTEM. 153 

law, shows the uniform failure of socialism even in small 
select communities under conditions highly favorable to 
success. Voluntary socialism, under the most flattering cir- 
cumstances, and with the most conscientious and enthusi- 
astic leaders, has been experimented with again and again. 
It is true that in certain instances, societies having social- 
istic features have existed for a while, but in none has 
there been vitality and growth. From '' Brook Farm" down 
to the present time, there have been occasional bands of 
impracticables who have repeated the experiment. Of 
course such little local voluntary communities are per- 
fectly harmless and have no likeness to a general political 
system. They, however, furnish a test of the principles 
under a thousand-fold greater chances for success than 
would be possible for the proposed New Order. If such 
mild and promising examples have proved futile, what 
might be expected as the result of a violent and compulsory 
commune, attempted, not with a voluntary and picked com- 
munit}', but with all the heterogeneous elements of society ? 
A menagerie let loose would be a fit illustration of the 
result. If attempted, it would very likely produce an up- 
heaval similar to the French Revolution. World-wide 
experience, as well as the teachings of Natural Law, prove 
the truth of the proposition, — that the condition of civili- 
zation or barbarism among nations is in ^proportion to the 
security and inviolability of individual property rights. 
Adam Smith asserted that the security afforded to property 
by the laws of England had more than counterbalanced the 
repeated faults and blunders of the government. It is not 
too much to claim that the foremost and commanding posi- 
tion of England and the United States of America among 
the nations, is due to the safeguards erected around prop- 
erty rights, and the but slightly obstructed operation of 
natural laws by governmental or other interference. No 
nation can be named where private accumulations are inse- 



154 THE POLITICAL ECONOMY OF NATUEAL LAW. 

cure, in whicli there is not a coexisting state of barbarism. 
These truths are so obvious that it seems superfluous to 
demonstrate them. But the fact remains that charlatans in 
political economy are making great efforts to disseminate 
opposite theories, and apparently with much success. 

It is the main province of legislation and political 
science to provide the best and surest means for protectiag 
industry. This is all-important, for the reason that the 
right of personal accvimulation is the most powerful of all 
encouragements to energy, thrift, and the increase of 
wealth. The certainty that a man can enjoy the fruits 
of his toil is the great stimulus to production, enterprise, 
and prosperity, with the individual and with the nation. 
In those parts of the world where the title to property 
depends upon a strong arm, or where it is liable to 
confiscation by the ruling power, production is confined to 
its rudest and most primitive forms. The doctrine of gen- 
eral or governmental ownership of land — which some 
visionary but well-meaning people think would "abolish 
poverty " — is already in force in large sections of Asia 
and Africa ; and as a natural result, there is no fixed prop- 
erty except of the rudest descri^Dtion, and valuables are 
either hid in the earth, or quickly carried by caravans to 
places where private ownership is recognized and protected. 

With human nature as it is, how many would be provi- 
dent, industrious, or economical under the most perfect 
system of socialism yet conceived ? Enterprise, ambition, 
invention, and progress would all wither, as if under the 
shade of the deadly upas. If an ideal millennium had 
come upon the earth, so that men loved others more than 
themselves, there would be true moral socialism from 
within ; but until such a time, civil Jaw and government 
will be indispensable. 

The genius of socialism seems to be embodied in the 
old adage that *' the world owes every man a living." No 



socialis:m as a political system. 155 

matter how laz}', improvident, or reckless he may be, his 
industrious neighbor, who by patient toil has become the 
owner of accumulated labor, is expected to divide with him, 
and, in future, to keep on dividing. 

Socialistic agitators ring so many changes on such re- 
cently coined phrases as " impending revolution," " wage- 
system slavery,"' " industrial crisis," etc., indicating some 
expected revolution, that some persons actually look for a 
time not far distant when the government, through whole- 
sale confiscation, will be able to take care of them, and 
work be a thing of the past. Is it a wonder that great 
masses of ignorant immigrants become saturated with such 
ideas, when it is considered that socialistic, atheistic, and 
anarchic literature forms their chief intellectual diet ? 
Many of them remain in solid, unassimilated masses, and 
learn little or nothing of our institutions or language. Here 
is a fertile field in which to sow the seed of moral and 
economic truth. The right sort of reading matter in their 
own tongues would do much to neutralize the baneful in- 
fluences which loom up on our national horizon like a black 
cloud. 



CAN CAPITAL AND LABOR BE 
HARMONIZED ? 



" One touch of nature makes the whole world kin.'''' 

Troilus and Cuessida. 

" He had a face like a benediction.'''' 

Don Quixote. 

" Not chaos-like together crusKd and bruis''d, 
But, as the luorld, harmoniously confus'd, 
Where order in variety we see, 
And where, though all things differ, all agree.'''' 

Pope. 

''^ If thou shouldst lay up even a little upon a little, and shouldst 
do this often, soon would even this become great. 

Hesiod. 



" Gain not base gains ; base gains are the same as losses.''^ 

Ibid. 

^^ Brother, Brother ! we are both in the lorong.'''' 

Gay. 



XIV. 
CAN CAPITAL AND LABOR BE HARMONIZED? 

Capital and labor, being natural interdependent condi- 
tions, are already harmonious. It is only personalities that 
are discordant. The conventional arbitrary division of 
society into two parts, respectively termed capital and 
labor, is prejudicial and misleading. Labor is like a tree 
of which capital is the fruit. The sentimental antagonism 
between the two which has sprung up in many minds — 
and it has no other existence — is unfortunate for both. 
Capitalists and laborers are relatively good or otherwise, 
but capital and labor are only good. How can two parts 
of a unit, each utterly incomplete without the other, be 
naturally antagonistic ? 

Human activity systematically applied, is labor; and 
the outcome, whether large or small, is product, or capital. 
Capital is only a name for preserved or stored-up labor. A 
stock of bows and arrows, baskets, or skins is the capital of 
an Indian, and the preserved harvest that of a farmer. 
Capital may be visible or invisible, material or mental. 
The wage-Avorker, and no less the school-teacher, and even 
the pupil, are all laboring to produce it. 

A baseless and wide-spread fallacy exists, to the effect, 
that, in some way, there is a limited and fixed amount of 
capital in the aggregate, so that if some have more, others 
must have less on that account. On the contrary, capital is 
like seed ; it tends to propagate itself, though not necessa- 
rily by making its original owner poorer. There is a con- 
stant creation of capital, and the larger the amount already 

159 



160 THE POLITICAL ECONOMY OF NATURAL LAW. 

in existence, the more easily and rapidly additions are 
made. There is a popular feeling that the very wealthy 
are "monopolists," and even their inanimate possessions 
almost seem to come in for a share of opprobrium. But 
however unwise, or even selfish, persons may be, j)i'oduct is 
good. It has both intrinsic and rex3resentative value. 

The Astor estates in New York are examples of great 
accumulation. But in each and every building belonging 
to them labor, skilled and unskilled, has been employed, 
paid for, and stored up in every detail, from foundation to 
cap-stone. Their care and repairs will also require future 
labor indefinitely. As wealth accumulates, it calls for higher 
and finer grades of jaroduction. Primitive communities 
have little use for artists, carvers, decorators, sculptors, and 
frescoers. This is no apology for wealth, for none is 
required. It is only a study of the laws, demands, and 
methods of an opulent civilization. If half a dozen wealthy 
proprietors locate together, even in a wilderness, labor is 
stimulated and growth takes place on every side. Stored-up 
labor not only pays taxes, but constantly demands active 
labor. Even its net income is reinvested, and goes to swell 
the great current of business enterprise. In those countries 
or cities where the economic accumulations are great, the 
poorest inhabitant shares their advantages. The public 
parks, libraries, and art museums which are accessible to 
every, one in all large cities, exist only as the fruit of great 
and concentrated wealth. A public garden or floAver-lined 
boulevard, made possible only by a vast surplus of stored-up 
labor, exhales its beauty and fragrance to the penniless 
visitor as much as though he were its sole owner. The 
modern municipality consists of a boundless amount of 
human energy and skill in preservation. To be consistent 
those pessimists who count " property as robbery " should 
remove to a desert. 

Labor-value is fixed by the average opinion of mankind, 



CAN CAPITAL AND LABOR BE HARMONIZED? 161 

and depends upon the intelligence back of it as displayed 
in the quality of product. Any other appraisement must 
necessarily be purely artificial. The world will freely pay 
a hundred times as much for a painting by a Meissonier as 
for one by an ordinary artist, and no theorizing Avill change 
such a relative valuation. Is this fact a hardship to the 
latter ? No ; because his production is no worse on account 
of the existence of a Meissonier' s, while, on the other hand, 
he is furnished with an ideal which will more and more 
inspire every stroke of his brush. 

Capitalists and laborers mingle in all degrees. Many 
highly successful employers work more hours than their 
employees ; and, as is well known, care and responsibility 
are often more wearing than physical toil. 

Under normal conditions, in the absence of strikes and 
obstruction, the demand for labor by advancing civilization 
will always equal the supply at steadily increasing rates. 
This will be no less true if labor-saving machines are yet 
multiplied, and even if new motors are discovered in addi- 
tion to those already utilized. Efforts, however, to force 
labor-values beyond the smooth working of Natural Law 
destroy confidence and react upon and injure the very cause 
they are expected to aid. AVhile wages have steadily in- 
creased, the value of capital, \vhich is measured by the rate 
of interest, has materially declined. 

Occupation is indispensable to luunan progress and har- 
mony. The drone, Avhether rich or poor, who lives in idle- 
ness or for selfish gratification, reaps the inherent penalty, 
which is decay. A large part of the discontent among 
manual laborers arises from the mistaken idea that happi- 
ness and contentment naturally come from wealth. But 
man is so constituted that he can absorb only a certain 
limited amount of material good, and every attempt to do 
more results in satiety and disappointment. Most men 
refuse to learn this lesson, except as the bitter result of 



162 THE POLITICAL ECONOMY OF NATURAL LAW. 

experience, but it is a fact that the sons of rich men begin 
active life heavily handicapped. Human life is barren and 
disappointing unless inspired by an abiding and worthy 
purpose, and no talent grows except through faithful exer- 
cise. Contributions to the world's wealth are as genuine 
when made in knowledge, science, art, or research, as in 
food or clothing. 

The claim is made on the part of labor that it does not 
receive a fair share of the profits of production. What 
constitutes a just division of these products ? Exactly 
what the so-called labor reformers and sentimentalists de- 
mand is a matter of great uncertainty. The only unanimity 
among them is in dissatisfaction. As any proposed new di- 
vision must be made by ever shifting artificial rules, there 
could be no substantial agreement. When the solid ground 
of natural princix3les is abandoned, the restless currents of 
sentimentalism reveal no resting-place. 

It is not strange that manual laborers often feel dissatis- 
fied. As a rule, they toil hard for a very moderate subsist- 
ence. When they look around and see many who have a 
surplus, they think there must be something wrong in a 
system under which there is such inequality. But such rea- 
soning is superficial. Men are created with unequal capaci- 
ties and powers, and it is beyond human ability to equalize 
them. Society could as effectually resolve that two and 
two make five. The world's conclusions cannot be arbi- 
trarily set aside. It values mental force at a higher rate 
than manual, and it would be as futile to attempt to change 
these conclusions as to level the Alps. Society is exact 
and unerring in its estimates. It marks its valuations on 
both mental and manual force with as great a degree of 
accuracy as is seen in the coinage of a mint. 

The brain force of a McCormick, which conceived the 
reaping machine, was greater in the results of its produc- 
tion than a. million strong right arms, each of which could 



CAN CAPITAL AND LABOR BE HARMONIZED? 163 

wield the sickle. The world, therefore, makes its appraise- 
ment of his product at millions of dollars, and willingly 
pays the obligation. Whether or not we like it, this law 
cannot be repealed. The brain power, not only of in- 
ventors, but of all those who possess the ability to organize 
and execute, is scarce, sought for, and therefore has a high 
valuation. The mental force that organizes, builds, and 
puts into operation a great railway system is worth, per- 
haps, millions/ because its product may be the settlement 
and development of two or three States or Territories. If 
this kind of force were more plentiful, the Avorld would not 
put such an extravagant valuation upon it. A thousand 
muscular bodies may be found as often as a single brain of 
this quality. No amount of sentiment can change the 
arrangement of these evolutionary principles. Were it in 
our power to explore deeply enough, we should probably 
find that it is even best as it is. It is only the few who are 
skilful in originating enterprises, and in conducting them 
to a successful termination. They also have a better knowl- 
edge of Natural Law, which they make the most of by 
securing its aid. If the many could command all these 
advantages of mental power, there would be a much wider 
table-land of equality. It is now only the lofty peaks of 
attainment and production that attract special attention. 
Having found that inequality is universal and based on law, 
it is unwise to complain of it, and foolish to expect to 
abolish it. Did the Creator make a mistake when he in- 
stituted the evolutionary order which makes men of unequal 
capacity ? As it is, every man gets the reward which 
comes from the exercise of his own productive energy. 

1 We do not forget that there are men of this class who have amassed 
large fortunes by stock manipuhxtions which are illegitimate. Such an 
exercise of mental energy is unnatural, perverted, and hostile to the best 
interests of society. Natural Law would sanction restrictive legislation 
when applied to such artificial operations, and also the positive and sure 
punishment of every form of dishonesty. 



164 THE POLITICAL ECONOMY OF NATURAL LAW. 

This fact furnishes a continual stimulus to the lower to 
advance towards the higher. Were it not for brain labor, 
we should still be in barbarism. It is the increased 
production of the mental force of the few that has 
developed civilization. Labor, which is now making com- 
plaint, is getting a large share of the benefits of this 
improvement, its blessings being enjoyed even by the 
humblest. 

Capital is only the surplus that is saved above consump- 
tion, and it is not only the progenitor of civilization, but it 
is all that gives value to labor. Without it there would be 
no demand for labor. So far, then, from being envious of 
another's greater attainment, we should rejoice over it ; for 
we are better off than we should be otherwise. The cap- 
italist who, with executive talent and millions of money, 
has built a railroad, has done a great favor to labor and 
society. Boundless acres, before useless, are by its influ- 
ence transformed into fruitful farms. Thousands of labor- 
ers, in addition to those who receive direct employment 
from its operation, thus find sustenance and occupation. It 
is a fallacy that the j)i'esence of the very rich in society 
tends to make the masses x^oorer. It is exactly the oppo- 
site. The sentimental and false ideas now prevailing on 
this subject are the fruits of demagogism and envy. There 
is a kind of discontent which is wholesome, for it stimulates 
effort ; but the variety now prevailing seems to be of the 
envious kind, for its spirit is to pull down rather than build 
up. If these conclusions are correct, it follows that im- 
provement for wage-earners must be looked for in harmony 
with them. We shall succeed if we call to our aid the 
powerful machinery of natural principles, but fail if we 
challenge and defy them. There is no panacea nor charm 
by which poverty may be abolished, and no magical cure 
for the ills of society and inequalities of fortune. There 
is, however, room for vast improvement, if sought in the 



CAN CAPITAL AND LABOU BE HAEMONIZED? 165 

right direction. We must work along the lines of Natural 
Law, instead of trying to cross them at right angles. 

Before indicating more fully how the relations between 
capital and labor may be harmoiuzed, let us note briefly 
some things which cannot accomplish it. 

It cannot be done by combinations of like elements, as 
of laborers with laborers and employers Avith emj^loyers. 
Natural competition always exists between occupations 
which are alike. If, therefore, a number of carpenters or- 
ganize an artificial combination which holds them together, 
it is in direct opposition to the law of natural competition. 
It is a combination all on one side, and is as incomplete as 
a four-wheeled carriage would be with two of its wheels re- 
moved. These carpenters are helpless because there is no 
demand but only supply in their combination. Improve- 
ment will not come by means of paternal forms of govern- 
ment, for the reason that the socialistic principle is fatal to 
individual enterprise, and antagonistic to all the influences 
which can inspire the many to Avork their way higher. 
Neither can it be brought about by the promulgation of 
sentimental doctrines Avhich teach the laborer that he is a 
poor, weak member of society, Avho needs guardianship. 
Everything of this kind increases dependence and dis- 
courages personal excellence and ambition. 

Eather should Ave look for improvement AvhercA^er the 
interests of the tAvo elements can be blended and unified, 
and production be increased, by subduing prejudice and 
cultivating harmony. Promulgate the fact that the inter- 
est of one is the interest of both. 

Co-operation has been suggested as a solution of labor 
troubles. This has merit but has not been uniformly suc- 
cessful. The requisite brain force to organize and conduct 
business enterprises successfully has often been wanting 
among working co-operators. But if they can secure a 
management which combines executiA^e ability and honesty. 



166 THE POLITICAL ECONOMY OP NATURAL LAW. 

tliey may get the advantages of proprietorsliip. Failing in 
this, co-operative experiments will not succeed. 

A system of profit sharing, by means of a more or less 
intimate industrial partnership, already considered in a 
previous chapter, is, however, more promising, and the prin- 
ciple is capable of wide and general application in one form 
or another. We believe that the escape from present diffi- 
culties can only be successfully sought in this direction, for 
nothing else will weld the two interests that are so popu- 
larly supposed to be diverse. The adoption of this plan 
will require capitalists and employers to take the initiative, 
which they can well afford to do in view of the prevailing 
discontent and antagonistic feeling in the ranks of labor. 
Whether or not there is good foundation for this feeling, it 
exists, and therefore some movement must be made, or all 
interests will suffer. These strained relations result in un- 
willing, imperfect, and lessened production, causing a loss 
to all interests. Their natural effect upon the laborer is 
seen in his rendering the least possible service that is com- 
patible with full wages. His heart is not in his work. 
Give him even a small stimulus besides mere wages, and 
then note if there be not improvement. Offer to those who 
are faithful and industrious a bonus at the end of the year. 
See if a division in this way of five, ten, or fifteen per cent 
of the profits will not prove mutually beneficial. The em- 
ployer should be frank and sympathetic with his employees 
and thus gain and merit their confidence and respect. In 
the case of railroad employees and other kinds of employ- 
ment where it is not practicable to divide a percentage of 
profits, a system of rewards for faithful and continuous 
service promises good results. The 7)iutual interest in the 
amount and quality of production is the important feature, 
and this may be attained in a variety of ways, of which the 
above are but suggestions. In this way, the employer will 
have interested friends in his service, instead of suspicious 



CAN CAPITAL AND LABOR BE HARMONIZED ? 167 

opponents working under a temporary truce. This would 
give strength and cohesion to all legitimate business enter- 
prises. Having harmony for a basis they would be pyramidal 
in stability. The liability of outside dictation, interference, 
or strikes, under such conditions, would not be worth men- 
tioning. "We earnestly advise employers to try experiments 
in this direction. It may at first appear that the plans 
proposed are not strictly in accord with Natural Law ; but 
upon investigation we find that the union between self- 
interest and self-exertion — not necessarily selfish in a low 
sense — is a principle inwrought in hu.man nature. In 
social economics, the laws of mind and of finance must 
be considered in their connection. They overlap and 
mingle, and exercise a modif3ung influence each on the 
other. 

To working-men we suggest that even if you have not 
the promise of a special dividend or bonus, your true inter- 
, est is with your employer, and not with outsiders. Your 
hopes of promotion rest with him. As a rule, it will be for 
his interest to advance you as your merits and services war- 
rant. A half-hearted service has an injurious moral effect 
on yourself. If you really belong higher than you now are, 
an opportunity, in accordance with Natural Law, will soon 
be afforded to rise. 

Finally, as in every other department, the inharmonies 
between buyers and sellers of personal service can only be 
overcome by a more intelligent recognition of the laws and 
principles underlying social economics. Openness to truth 
must take the place of hardness and prejudice on both sides. 
Employers must win the respect — yes, and even the affec- 
tion — of their help, by fraternal interest and forbearance. 
Pride on both sides is the great source of friction. By 
immutable law, good-will always tends to awaken a respon- 
sive vibration. 

The ideal brotherhood of humanity, which many vainly 



168 THE POLITICAL, ECONOMY OF NATURAL LAW. 

hope to galvanize into existence by legislative or artificial 
expedients, can be hastened by the cultivation of the higher 
principles of the human soul. Whatever growth starts 
from within is natural, and it will finally penetrate society 
to its outermost limits. 



WEALTH AND ITS UNEQUAL 
DISTRIBUTION. 



" Order is Heaven'' s first law ; and this confessed, 
Some are, and must he greater than the rest; 
More rich, more wise ; hut who infers from hence, 
That such are happier, shocks all common sense.^^ 

Pope. 

He heapeth up riches, and knoweth not who shall gather them.'''' 

Ps. xxxix. 6. 

'''•High stations, tumults, hut not hliss, create; 
None think the great unhappy hut the great."" 

Young. 

" Man wants hut little here helow. 
Nor loants that little long.''^ 

Goldsmith. 

" A man he was to all the country dear, 
And passing rich with forty pounds a year.'" 

Ibid. 



XV. 

WEALTH AND ITS UNEQUAL DISTRIBUTION. 

The colossal fortunes that were accumulated during 
and since the great civil war attract wide attention, and the 
conclusion is reached that natural economic laws must be 
faulty, otherwise such marked inequality would not exist. 
Our decided preference is for a more idealistic condition of 
society in which, if there were not uniformity, there might, 
at least, be much less sharply defined extremes. 

While, however, with much truth, the present is regarded 
as an era of great and selfish Mammon worship, a more 
careful and comparative investigation shows that the tide 
of human altruism among the possessors of great wealth is 
rapidly increasing in volume. Especially during the last 
decade, the amount of private wealth which has been freely 
devoted to public uses, in the shape of school, college, and 
university endowments, libraries, hospitals, art museums, 
scientific equipment, manual training institutes, and college 
settlements, to say nothing of ordinary charities, has been 
vast and constantly increasing. The time seems not far 
distant when the possessor of great wealth who does not 
recognize his moral obligation to society, and the privilege 
of some kind of ministry, will feel isolated and uncom- 
fortable, if not really ashamed of himself. As the spirit 
of voluntary benevolence receives the grateful recognition 
of society, a laudable emulation will doubtless increase it 
yet more rapidly in future. But to grow it must be volun- 
tary and spontaneous. Warmth, moisture, and a hospitable 
soil, will turn an acorn into an oak ; but the growth 

171 



172 THE POLITICAL ECONOMY OE NATURAL LAW. 

is from within, and any forcing from without would be 
fatal. 

Any general movement towards a coercive socialism or 
governmental confiscation would chill and paralyze the 
spirit of benevolence, and at the same time stir into ac- 
tion the baser and more selfish elements of human nature. 
If the rights of legitimate private ownership, which have 
existed through the entire historic period, indorsed by the 
highest ethical teaching, are invaded, whether by revolu- 
tion or throiigh the forms of law, it would indicate a great 
moral collapse. All beneficence must be voluntary, and 
would cease to exist with the disappearance of individual 
ownership. 

If the complicated problem of how to bestow large 
charities without real danger to character, through the 
growth of dependence and pauperization, could be thor- 
oughly solved, there is little doubt but that benefactions 
would be speedily multiplied. Every student of social 
science, as well as every would-be benefactor, appreciates 
the diificulties which surround this question. 

Can fortunes be limited ? This is a subject which has 
elicited much discussion. If it were possible for the gov- 
ernment to fix some limit, or a graduated scale of taxation 
which would amount to a limit, without any violation of 
personal rights or moral law, could it be made practically 
operative as human nature is constituted ? Let us imagine 
an attempt to establish a legislative maximum under a possi- 
ble socialistic economy. Suppose it be placed at fifty mil- 
lions. There are perhaps a score, more or less, of private 
fortunes in the United States that would be affected. But 
others would suggest twenty, ten, five millions, or perhaps 
one million, as the outside boundary for private ownership. 
Again, a large number would vote for a hundred thousand, 
or twenty thousand, and still more for five, and so on down 
to one thousand, or less, as a final limit. As the improvi- 



WEALTH AND ITS UNEQUAL DISTRIBUTION. 173 

dent and unthrifty are usually in the majority, the proposed 
standard would vibrate downward, and endless controversy 
would prevent any final settlement. Let it once be estab- 
lished that a majority, through representative legislation, 
could vote money from an individual without rendering an 
equivalent, and where would be the end ? There could be 
none. Any legislative majority, however great, can never 
really change a natural or moral law by a hair's breadth. 

It is not great fortunes, jper se, that need excite appre- 
hension, but rather the means through which they are 
accumulated. The great necessity of the times is a revival 
of thorough honesty, and the sure punishment of its viola- 
tion. Public sentiment must not applaud " sharp financier- 
ing" as "brilliant," but denounce it as socially disgraceful, 
and punish it as a criminal offence. 

By sentimental comparison there ,is a general feeling of 
relative poverty on account of existing great private for- 
tunes. Men measure themselves among themselves. But 
no one is absolutely poorer, but rather richer, on account of 
existing wealth, even though it be controlled by private 
ownership. Every social unit in the body-politic is, at 
least indirectly, better off for general accumulation. It is 
the human stock in trade, and its lines of relationship 
extend indefinitely in all directions. 

It is a very common but inaccurate saying, that "the 
rich are growing richer and the poor poorer." A superficial 
view may give such an impression, but any thorough re- 
search shows that the latter part of the assumption is 
untrue by actual statistics. 

There have been changes in general economic conditions 
within the last thirty-five years, which have incidentally 
rendered colossal accumulations increasingly easy of attain- 
ment. The opportunities afforded by the era of inflation 
which accompanied the civil war were unprecedented. If 
the Union had been disrupted, and the currency and obliga- 



174 THE POLITICAL ECONOMY OF NATURAL LAW. 

tions of the government not finally brought back to a specie 
basis, the results would have been far different. Had infla- 
tion continued indefinitely, general bankruptcy would have 
ensued and values largely vanished. Such was actually 
the case with our neighbors of the South. This shows the 
application of laws of great significance. Any era of tem- 
porary inflation furnishes great opportunities for the bold 
and sagacious, and for those already rich, to add greatly to 
their possessions. Conditions and tendencies are foreseen 
and taken advantage of. Property rises in value during 
periods of inflation ; and if succeeding contraction is fore- 
seen, so that it is marketed before the inevitable shrinkage, 
there is an abnormal profit. 

Normal conditions, without either inflation or contrac- 
tion, are greatly to the advantage of the wage-earner, and 
all others who have little accumulated wealth. The under- 
lying laws which govern these alternations are so plain, 
that it seems unaccountable that many would-be "re- 
formers," " populists," and " friends of labor " persistently 
advocate inflation, and " cheap money," even to the extent 
of parting company with the great majority of the com- 
mercial world. A feverish inflation is the greatest calamity 
that can happen to the laborer and to all of moderate 
means. The resulting increment goes to those who already 
have much on hand, for values of existing products are 
expanded. It is true that if the same property is held 
through the succeeding contraction, the shrinkage balances 
the inflation ; but the shrewd and far-seeing financier watches 
the economic horizon, and generally avoids the decline. It 
is the poor and unintelligent who are the victims of such 
fluctuations. Business vibrations, even if much less intense 
than those of the civil war, give the bold and wealthy 
operator great advantages. They directly kindle unwhole- 
some speculation, and discourage, not onl}^ honest industry, 
but legitimate commerce. An era of inflation or cheap 



WEALTH AND ITS UNEQUAL DlSTllIBUTIOX. 175 

money — so greatly desired at the present time by mis- 
taken enthusiasts — while making some unscrupulous rich 
persons richer, would be a real misfortune to labor, indus- 
try, agriculture, and all legitimate business interests. It 
does, indeed, lend a transient glamour to superficial condi- 
tions, but its j^ermanent elt'ects are disappointing and dis- 
astrous. It is like the reaction which follows alcoholic 
intoxication. We ask those who are urging unlimited 
silver coinage or fiat money — whose motives in many 
cases we respect — to seriously consider these immutable 
principles and tendencies. 

In periods of inflation wages rise more slowly than the 
necessities needed by the workman, and, as a rule, salaries 
for personal service advance only after considerable delay. 

Prominent among other more permanent and legitimate 
causes than inflation, which have made the recent accumu- 
lation of great fortunes possible, has beer? the remarkable 
expansion of our railroad system. This in rapidity and 
extent has been unique and entirely unprecedented in the 
world's history. Within the last two or three decades a 
territory larger than the aggregate area of all the States 
east of the Mississippi River has been permeated and de- 
veloped by the construction of these great public highways. 
The wealth that has been created by this means ranges in 
the thousands of millions. To illustrate, take an individ- 
ual case, and trace the special opportunities afforded for the 
accumulation of wealth by this great movement. A man 
with great abilit}^ to organize and execute, and with wise 
forecast, possessed of experience and capital, grasps the 
boundless possibilities of a sparsely settled and unpro- 
ductive territory. He foresees that all that is necessary to 
transform its worthless acres into fniitful farms, and dot 
them with flourishing towns and villages, is cheap trans- 
portation. He projects vast schemes of railroad building 
and executes them, not as a philanthropist, but as a saga- 



176 THE POLITICAL ECONOMY OF NATURAL LAW. 

cious business man. He lias faith, in natural principles, 
"whicli show him that the result of his venture will be a 
domain occupied by thousands of thrifty settlers, who will 
furnish his road with business. As a result of his energy 
and persistence, and in strict accord witb Natural Law, his 
individual fortune is, perhaps, increased by millions, and he 
has, if honest, earned his reward. Through his instrumen- 
tality there has been added to the capital of the nation, not 
only the railroad, but many times its value in other pro- 
ducts and improvements. Land, before worthless, becomes 
valuable and productive. Instead of a scanty growth of 
sage brush, boundless fields of golden grain await the 
advent of the reaping machine. Where an occasional herd 
of buffalo was almost the only sign of animal life, number- 
less droves of cattle and sheep are now seen fattening for 
shipment, to supply the never-ceasing food demand of the 
world. In place of vast solitudes broken only by the pass- 
ing of an emigrant train or an Indian hunter, thousands of 
brawny farmers and laborers find employment and suste- 
nance. Such a great residt is the product of the mental 
force, possibly, of one man. He has furnished occupation 
for thousands of workmen who would otherwise be left to 
overstock the labor market. By the amount of his pro- 
duction he has fairly earned his fortune. While his own 
wealth has been enhanced, he has caused indirectly a pro- 
duction many times greater. The transaction was only a 
sale of mental force at such a price as the world was will- 
ing to pay. The case supposed is only illustrative, but it 
is typical of many occurring in real life. In the accom- 
plishment of such results, truth is indeed "stranger than 
fiction." 

Other important means by which the opportunities for 
making great fortunes have been multiplied are found 
in the utilization of steam and electricity, and by the 
great number of inventions. These have changed business 



WEALTH AND ITS UNEQUAL DISTRIBUTION. 177 

methods, and increased in almost geometric progression the 
practical power and possible achievement of a single indi- 
vidual. Great personal abilit}^, when supplemented by 
such forces, becomes almost irresistible. 

The era just passed has been a transition period. The 
remarkable change in business conditions and methods has 
been so rapid, that comparatively few had the foresight and 
courage to grasp promptly the golden opportunities as they 
were presented. They were never so numerous and prolific 
in any past period, and they furnished the special condi- 
tions by means of Avhich, perhaps, nine-tenths of the great 
fortunes have been gathered. Not only the building, but 
the operating, consolidating, systematizing, and, to some 
extent, the bujdng and selling of these great highways 
have contributed to the result. The flow of general capital 
into small enterprises of a profitable character is easy and 
rapid, but in great undertakings it becomes timid and sus- 
picious. This has put a very high premium upon unusual 
foresight and executive ability. 

The two great estates of Astor and Stewart are in- 
stances of great accumulation that have taken place outside 
of these special conditions and opportunities. They rep- 
resent respectively the departments of real estate and 
commerce. The Astor estate furnishes, perhaps, the most 
conspicuous example in this country of what socialistic 
writers call "unearned increment." But is there practi- 
cally any such thing ? It is a natural law that any un- 
usual opportunities for gain will call out seekers and com- 
petitors. If unearned increment is such a prize as we are 
told, why have not all, or at least more, sagacious men 
bought land ? Simply because they thought there were 
better investments elsewhere. A careful examination will 
show that, on an average, a fair interest on the money in- 
vested in land, plus taxes and assessments, will in the end 
amount to more than the so-called unearned increment. 



178 THE POLITICAL ECONOMY OF NATURAL LAW. 

There are exceptions to this rule in rapidly growing cities 
and in newly settled farming regions, but not more than in 
other kinds of enterprise. This theoretic fallacy may be 
disposed of by suggesting that, had there been any greater 
prospect of profit than in other average investments, the 
shrewd business men of America would long ago have dis- 
covered it, and would have invested more in land and less 
in other objects and occupations. It is probable that even 
the Astor estate has paid out in taxes and assessments all 
the natural increase that has taken place, which is in excess 
of a moderate rate of interest on its investments. Land 
must advance in value very rapidly to outstrip these com- 
bined charges. The Stewart estate is an example of what 
individual brain power, exerted in harmony with Is"atural 
Law and by its aid, can accomplish in the domain of com- 
merce and traffic. 

The great fortunes that were made in mining, and in 
mining speculations, belong to an era that culminated sev- 
eral years ago. At present, anything but slow and gradual 
accumulation in this de]3artment is exceptional. 

In view of these facts, it seems evident that in most 
cases the great fortunes were incidental to the unique op- 
portunities presented during the last twenty or thirty years. 
If these special conditions were temporary in their charac- 
ter, the golden opportunities have largely passed, and for- 
tune making in the future will be slower and more difficult. 

In regard to railroad building, nearly all the available 
territory is now occupied by through or trunk lines, and in 
future this business will be more confined to the construc- 
tion of short and comparatively unimportant feeders. The 
undeveloped territory of our own country is becoming more 
limited. This will narrow what has been a most prolific 
field for the rapid enhancement of capital. 

It also seems improbable that we can expect any such 
radical progress in inventions and business methods from 



WEALTH AND ITS UNEQUAL DISTRIBUTION. 179 

the present starting-point as has been made in the past. 
Better appliances, and a nearer approach towards perfection 
in the application of steam and electricity, Avill no doubt be 
reached ; but it is not probable that future improvements 
will be as radical as those of the last half-century. When 
a barrel of flour can be carried from Chicago to New York 
for less than it costs to cart it across either city, it is evi- 
dent that the process cannot be greatly improved. 

Again, as wealth has accumulated, the competition of 
capital with capital has become more intense. Interest, or 
the selling rate for the use of capital, has declined nearly 
sixty per cent. It has gradually fallen from the old stand- 
ard of six per cent to a point Avhich makes it probable 
that a two and a half per cent government bond can be 
floated at par. If the value of wealth be estimated on the 
basis of its earning power, a million of dollars is now 
worth less than one-half of what it was thirty years ago. 
Competition between investors is so great that almost any 
railroad, which pays five or six per cent dividends on its 
stock, is in danger of being paralleled. 

The general evenness of prices consequent upon tele- 
graphic communication and rapid transportation is another 
instance of the lessening opportunities for great gains by 
speculative investments. Important changes in market 
values are discounted long in advance, and are, therefore, 
very gradual. Price fluctuations being smaller, successful 
corners and manipulations become more difficult and in- 
frequent. 

The laws of inheritance are also great and constant 
forces working toward the disintegration and distribution 
of great estates. In this country, with no law of primo- 
geniture, and where, as a rule, there are several heirs to 
each estate, its dissolution as a great unit becomes very 
probable. The Stewart estate, before alluded to, is an 
example. The longest life is • not sufficient for a single 



180 THE POLITICAL ECONOMY OF NATURAL LAW. 

individual to absorb more than a minute fraction of the 
wealth of the community, and, whether more or less, the 
probabilities are, that at his death it will cease to continue 
as an organized, accumulative force. 

The laws of heredity are also powerful in their wealth- 
dispersing tendency. While there are exceptions, the sons 
of very rich men do not commonly inherit the peculiar 
accumulative ability which characterized their fathers. 
The dominant and controlling talent is generally greatly 
modified in the son. Instead of a financier, inclination 
often leads him to become an artist, a professional man, or 
still oftener, a gentleman of leisure. In place of the habits 
acquired by an early economical discipline, are those of an 
extravagant and luxurious character, incidental to his 
position. He begins where his father left off ; and, in 
many cases, ends where his father began. Not only the 
exceptional talent is generally lacking, but the more neces- 
sary impelling motive. Most of our millionaires began 
active life with little or nothing, and were obliged to 
exercise self-denial and economy which laid the foundation 
for their future success. 

Statistics show that the average life of capital is not 
equal to the average life of man. It is a prevalent idea 
that the success which has attended the efforts of the few 
is due, in a great degree, to chance or luck ; but this is a 
mistaken view. Favorable environment is important, but 
exceptional financial talent, bringing to its aid the principles 
of Natural Law, improves and transforms its conditions. 
The character of environment, therefore, becomes largely 
a matter of choice, rather than fixed and uncontrollable. 

The general average of wealth is higher at present than 
at any previous time, partially as the result of the special 
causes already enumerated. 

It seems probable that the passion for sudden wealth, 
which has caused so much unfavorable comment by writers 



WEALTH AND ITS UNEQUAL DISTRIBUTION. 181 

of other nationalities, will dinainish as conditions become 
more stable, and opportunities for rapid gain fewer. The 
fact that the amount of human happiness has but little 
connection with the amount of individual wealth will 
become better appreciated. National life and character 
have hardly had time to become adjusted to the changed 
conditions brought about by the rapid expansion before 
noticed. 

All classes, including the poorest, are greatly benefited 
by the operations of capital. For illustration, the immense 
Vanderbilt and Gould estates represent most largely indi- 
vidual wealth in railroads and telegraphs. The fact of 
personal ownership, with its income of four or five per 
cent on the investment, makes no difference with the great 
balance that goes directly to labor for service and materials. 
Every laborer gets as much as if the property belonged to 
ten thousand stockholders, instead of largely to one. This 
fact also makes no difference with the productive power of 
capital in performing the multiform functions of society 
and commerce. If there be a difference in either direction, 
the organization and operation are usually more perfect 
under concentrated control. But, aside from these great 
public enterprises, there are large investments of a private 
nature, in the. domain of art and luxury. The palace of the 
rich may excite the envy of the passing laborer, but its 
value in money has already been disbursed to the mechanics 
who labored in its construction. Every piece of material 
has been changed, shaped, and fitted from its condition as 
raw material by busy workmen, who have thereby had 
occupation and subsistence. 

The great and mischievous fallacy which forms the basis 
of socialistic literature and sentiment may be summed up 
in a single sentence ; viz., that all wealth is created hy labor, 
and, therefore, belongs to the laborers who have produced it. 
This plausible proposition may also be disposed of as briefly. 



182 THE POLITICAL ECONOMY OP NATURAL LAW. 

The wealth does belong to the labor that produced it, but 
the larger and move valuable part of this labor was mental. 
Socialists ignore brain labor, which by ]Sratural Law is much 
the more important of the two. Many clergymen, philan- 
thropists, benevolent and sentimental people, who are favor- 
ably impressed by some apparently humane and attractive 
features of socialism, overlook this point. The typical 
European socialist is intelligent and logical. He is a mate- 
rialist, and does not believe in mind except as being a 
manifestation of matter. He therefore ignores mind as a 
factor in production. Even economists like Smith, Mill, 
and E-icardo gave little attention to the great part played 
by brain-force in general x^i'oduction. Their observations 
were made prior to the present era of great invention, when 
the influence of mental power Avas not nearly so predomi- 
nant. The theory that mental effort is' not labor, is too 
shallow to merit serious consideration. Is not the finished 
edifice as miich the work of the architect as of the mason 
or carpenter ? Does not the student, clergyman, merchant, 
or inventor labor ? On the supposition that wealth is the 
product of physical labor only, some machines would have 
very large value when measured by man-power. 

Under a government like ours, where all enjoy equal 
rights, it is a malicious proceeding to foment class feuds 
and arouse envious passions. It is an abuse of liberty, and 
its fruit would be tyranny in new and worse forms. 

During the time in which capital has decreased fully 
sixty per cent in earning power, there has been an increase 
in the productiveness of labor. While wages have in- 
creased, their purchasing power has also been enhanced by 
an average decline in the prices of food, clothing, and other 
necessities. As a rule, in America we have few idle rich 
men. An eminent statistical authority has estimated that 
not more than ten per cent of the population of America 
have accumulated an aanount of property sufficient to 



WEALTH AND ITS UNEQUAL DISTRIBUTION. 183 

enable them to live upon its income without personal 
exertion in ease they so desired. 

The aggregate production is much larger, and society 
richer, by reason of the fact that in accord with Xatural 
Law, labor is intelligently directed and thoroughly organ- 
ized by the brain power of capital. 

While the rights of great wealth, legitimately acquired, 
cannot be ruthlessly invaded, every rich man owes a great 
debt to humanity. His unchallenged ownership is a social 
trusteeship. The passion of accumulation, as an end, is a 
curse, and its inherent penalty, though often slow, is sure. 
Great financial ability involves a supreme test of character. 
Avarice shrivels the human soul. Ca})ital is good for the 
man who owns it, but if it owns him it becomes tyrannical. 
Such an one is like a bee submerged in its own honey. To 
one who occupies a racial rather than a selfish standpoint, 
great wealth, as a means, is a power and an honor. 



THE LAW OF CENTRALIZATION. 



" All roads lead to Eome."" 

" Westward the course of em2nre takes its way ; 
The first four acts already past, 
A fifth shall close the drama with the day : 
Timers noblest offspring is the last.'"- 

Bishop Berkeley. 



^^ For he that hath, to him shall be given.'''' 

Mark iv. 25. 

" Even there, luhere merchants most do congregate.'' 

Merchant of Venice. 

" There is America, ickich at this day serves for little more than 
to amuse you with stories of savage men and uncouth manners, yet 
shall, before you taste of death, shoio itself equal to the whole of that 
commerce which now attracts the envy of the world." 

Burke. 



XYI. 

THE LAW OF CENTRALIZATION. 

Everything has its centre. In every department of 
human activity there is some localized fountain where 
forces are gathered, and from which they are radiated. All 
organic growth, whether vegetal, animal, political, or moral, 
starts from within and progresses outwards. As the centre 
of the solar system radiates his light and heat in all direc- 
tions, so other centres send forth their influences, whether 
social, economic, political, or ethical. But while constantly 
giving out, they also powerfully draw, assimilate, and con- 
centrate. Paris, as a centre of fashion, not only sends forth 
its authoritative modes, but at the same time concentrates 
more and more of her own special characteristics. Growth 
once under Avay, tends to gain in relative momentum. Ten 
talents are added to ten more easily than one to one. Cen- 
tralization and specialization are rapidly augmenting forces. 

Population is heaping itself up in great cities, and 
wealth, science, art, and industrial production are respond- 
ing to the same law. These are the results of " natural se- 
lection," and amount to a normal socialism. The great focal 
points where human interests have converged during the 
historic period have shifted about. Rome, Florence, Venice, 
Nuremburg, Vienna, Paris, and London, at different times 
have been the great fountains of human activity. 

But the present movement is quite unlike anything of 
the past. Invention, rapid transportation, and communica- 
tion have revolutionized former methods, and the modern 
metropolis has unique poAvers and possibilities. 

187 



188 THE POLITICAL ECONOMY OF NATURAL LA"W. 

Any careful observer, who lias watched the currents of 
trade in the great commercial centres for some time past, 
could not have failed to notice a constant tendency towards 
centralization. It has prevailed not only in American cities 
and towns, but throughout the commercial world. This 
proves that it is not in consequence of local or special 
causes, but the result of influences which operate uniformly 
in obedience to J^atural Law. This conclusion is further 
confirmed by the fact that it has not been caused by, 
nor in any way connected with, legislation. We therefore 
conclude that it is a necessary feature of the present great 
development of invention and civilization. 

The growth of cities has been very marked, and also the 
expansion of the facilities for production. 

There is so much apprehension at present in regard to 
the possible power of gigantic monopolies, that it is worth 
while to trace out the working of the natural economic laws 
which have produced these phenomena, and also their legit- 
imate tendency. The present is an era of monopolies. 
The fact that a few great firms or corporations in each city, 
and in each department of business, are able to attract a 
large and increasing share of the aggregate patronage of the 
public, is patent to every observer. The Scriptural declara- 
tion, that " whosoever hath, to him shall be given," is being 
literally carried out. For illustration, notice the retail dry- 
goods trade in any of our great cities. Years ago this 
business was transacted by a large number of small or mod- 
erate-sized establishments, scattered in different neighbor- 
hoods. At the present time the greater part is transacted 
by a few colossal establishments. These great institutions 
have, in many cases, added building after building, and 
department after department, until their proportions are of 
astonishing magnitude. All other branches of trade are 
more or less under the control of the same natural tenden- 
cies. There is also a process of centralization in locality, 



THE LAW OF CENTRALIZATION. 189 

no less marked. The larger cities, owing to their greater 
facilities and attractions, and to the ease and rapidity of 
communication, draw business from the smaller places which 
was formally under home control. In addition to this, 
there is a decided grouping of each kind of business in some 
special locality. There is a dry-goods quarter, a banking 
quarter, and one for almost ever}- leading department of 
business. Concentration in locality is added to centraliza- 
tion of capital and. enterprise. 

The operation of this law in connection with manufac- 
turing is also imiform and strong. New industrial centres 
are formed in conformity with natural conditions and ad- 
vantages. 

Anotlier manifestation of centripetal law is seen in the 
growth of cities. At distances somewhat uniform, where 
railroad s^'stems converge, great commercial centres grow 
up, each having its quota of tributary territory. Their 
location and growth ^re not matters of chance, as many 
suppose, but entirely in accordance with fixed laws. When 
one point gets a fair start in advance of its competitors, 
like a larger magnet, it has increased drawing power. It 
seems to gain an accelerating momentum, so that any city 
of given size has four-fold greater growing qualities than 
one half as large. While tlie lesser may increase somewhat, 
it naturally pays tribute to the greater. This is as irre- 
sistible as the law of gravitation. The centralizing force 
that locates special kinds of business in special places is 
also well defined. The milling industry of Minneapolis, 
the packing of Chicago, the importing of New York, are 
examples. ]N[anufacturing, although not so thoroughly 
confined to single places, has its focal points ; as Pittsburg 
in iron, Lowell, Lawrence, and Fall Elver in cotton. Pater- 
son in silk, and Trenton in pottery. 

At first glance, it looks as if this condition of things, 
especially in the case of great mercantile concerns, Avas 



190 THE POLITICAL ECONOMY OF NATURAL LAW. 

abnormal and injurious. Admitting that it has aspects of 
this kind, let us examine carefully its practical Avorking. 
Imagine a typical American city, with half a million popu- 
lation. Twenty-five years ago its retail dry-goods business 
was done by a large number of small shops in different 
localities. ]^J"ow it is largely monopolized by half a dozen 
mammoth establishments located almost side by side. 
What is the effect of this condition of things on the 
general public, comprising say four hundred and ninety-five 
thousand out of the half -million people ? They show by 
their action that (unless they are greatly deceived) they 
find lower prices, greater varieties, and better selections at 
these great establishments than elsewhere. We are obliged 
to accept this opinion of the great majority of an intelligent 
public as conclusive. This disposes of ninety-nine one- 
hundredths of the entire population so far as dry goods are 
concerned. The next class, perhaps five thousand persons, 
who, under former conditions, would be in business for 
themselves, are now either junior partners, or employed on 
salaries by these great firms. They lose the net difference, 
whatever that may be, between the two following positions : 
on one hand, greater independence and the dignity of pro- 
prietorship, but accompanied with uncertainty of success ; 
and, on the other, sure, but moderate success, with more 
dependence. The fact that but a small proportion of men 
succeed when in business for themselves, as shown by 
statistics, will still reduce the net difference so much that, 
even with this small class, it is doubtful which way the 
advantage would lie. These two classes comprise every- 
body except the great firms themselves, whose interests it 
is not necessary to consider. These great institutions have 
attained their prominent positions by a regular system 
of evolution, and are fair illustrations of the '' survival 
of the fittest." Given, a rare combination of capital, ex- 
ecutive ability and power to organize, with favorable envi- 



THE LAW OF CENTRALIZATION. 191 

ronment, and we have the conditions of increase almost 
without limit. 

In tracing still further the operation of these laws, let 
us, for illustration, again briefly notice two great monopo- 
lies, which are, perhaps, popularly regarded as the most ob- 
jectionable of any in this country ; viz., the "Western Union 
Telegraph Company and the Standard Oil Company. It is 
not their private transactions with other companies, but 
their relations to the general public, that we are now con- 
sidering, l^o one is forced to have business relations with 
them, unless he considers it for his interest. It is in their 
business relation with the public, as sellers of telegraphic 
facilities and of oil, that we now look at them ; for they 
have no power otherwise to injure the average American 
citizen. What is now the "Western Union Telegraph Com- 
pany was formed, as nearly every one is aware, by the con- 
solidation of smaller companies and the absorption of rival 
but weaker organizations. They were Avilling and ready to 
be " absorbed," and were well paid for the operation. The 
prevalent impression is, that because this business is almost 
entirely controlled by one great organization, it necessarily 
becomes a dangerous and powerful monopoly, against which 
the public has no protection. This prejudice against all 
great corporations is a cliaracteristic of the present time. 
There may be more danger in the prejudice, or what may 
come of it, than in the organizations themselves. 

Our safety consists in the fact that the natural laws of 
supply and demand are sovereign, and that there is no 
danger of their repeal or suspension. "What are the practi- 
cal facts relating to the telegraph company ? It is a seller 
of telegraphic facilities ; and the public, which represents 
demand, holds the key to the situation. The company can 
afford to sell its services at a lower rate than half a dozen 
smaller ones could possibly do. Will it ? Yes, in the 
long run : for self-interest will force it in that direction. 



192 THE POLITICAL ECONOMY OF NATURAL LAW. 

There is what may be called a normal rate for this service ; 
and in case the management make a tariff above this point, 
demand falls off and profits shrink with as much certainty 
as they would in case it were j)'Lit below it. Managers of 
corporations do not always discover at once how low the 
equilibrium of such rates lies, and that that point is always 
the most profitable ; but experience is a persistent teacher, 
and these laws are continually pressing in the right direc- 
tion', until they vindicate themselves and obstructions are 
removed. An illustration of the operation of Natural Law 
in governing demand, is seen in the effect of successive 
reductions in the rate of postage. Every experiment 
made by the government in this way has been success- 
ful. The increase of business that followed each reduc- 
tion was so great, that but a very short time elapsed 
before the net revenue was larger than before. The 
true normal rate may still be a little below any point yet 
reached. 

The fact that railroad or telegraph corporations have, or 
have not, " watered their stocks," is popularly supposed to 
have a great influence on their rates of service. Not in the 
least. If for any speculative reason the stock of the West- 
ern Union Telegraph Company were largely increased or 
diminished in its nominal amount, the management would 
find that it would be entirely inexpedient, for that reason, 
to change its tariffs. Its material facilities would remain 
as before, and so would the demand for their employment- 
In other words, the normal point of greatest business and 
profits would remain the same, regardless of changes in the 
nominal amount of stock. 

We have considered these extreme cases of monopoly, 
not because we admire or defend them, but only because 
they furnish another illustration of the supremacy of 
Natural Law. They may be powerful enough to influence 
legislation, but they cannot change natural principles. 



THE LAW OF CENTEALIZATION. 193 

Their business methods, and dealings with rivals and 
competing organizations, may have been indefensible, but 
unvarying natural conditions will make them powerless 
to harm the humblest American citizen. The man who 
lets their stock alone, and only buys their product, can 
never be harmed. They cannot force demand, but only 
court it. 

The most intense and ceaseless competition is that of 
capital with capital. Often great manufactories run — 
sometimes for years — not only without profit or interest, 
but at a small loss of principal, rather than to shut down. 
To stop is ruinous, because skilled help is scattered, and 
everything disorganized except fixed charges, which go on, 
and sometimes even increase. The public get the benefit 
of consequent cheap production. So long as freedom and 
confidence prevail, idle capital is always waiting to pour 
into any channel that promises a return of four per cent 
per annum. 

We are led to conclude that the menace to government 
and to citizens by great business combinations is much 
overrated. Without regard to legislation, Natural Law 
hedges them in on every side. While great aggregations 
of capital, in their operations, are subject to abuses, they 
are great forces in production, and have an important place 
in the economic functions of society. 

There is every reason to believe that as art, invention, 
and civilization continue to progress, centralization and 
concentration will become still more pronounced. Organ- 
ization in accord with law is growing more exact and 
complete. Large cities will grow larger and specialization 
will be more and more thorough. Each one will do just 
that which he can do the most perfectly, and thereby 
make his services to society of the highest value. Wher- 
ever cotton, silk, wool, iron, steel, ships, or any other 
product can be produced or manufactured with the greatest 



194 THE POLITICAL ECONOMY OF NATIJEAL LAW. 

facility and economy, at those points the inherent centrip- 
etal and centrifrugal forces will strengthen. Everything 
will have its distinctive headquarters, and there will be 
concentrated the supreniest excellence, adaptation, and 
economy. 



ACTION AND REACTION, OR "BOOMS" 
AND PANICS. 



" Extremes in Nature equal good produce; 
Extremes in man concur to general wse." 

Pope. 

" After a storm comes a calmy 

" There is in the worst of fortune the best of chances for a happy 
change.'''' 

EUKIPIDES. 

" There is a tide in the affairs of men, 

Which, taken at the flood, leads on to fortune; 

Omitted, all the voyage of their life 

Is bound in shallows and in miseries. 

On sucJi a full sea are we now afloat; 

And we must take the current when it serves, 

Or lose our ventures.''^ 

Julius C^esak, Act IV. 

^^ The time is out of joint.'''' 
^' Hamlet, Act I. 

" One extreme follows the other.'''' 

" Every white will have its black, 

And every sweet its sour.'''' 

Sir Caeline. 

"Jft every affair consider what precedes and what follows, and 

then undertake if'' 

Epictetus. 

^^ Cause and effect, means and ends, seed and fruit, cannot be 

severed; for the effect already blooms in the cause, the end pre-exists 

in the means, the fruit in the seed. The changes which break up at 

short intervals the prosperity of men are advertisements of a nature 

whose law is growth.''^ 

Emekson. 



XVII. 

ACTION AND EEACTION, OR "BOOMS" AND 
PANICS. 

Polarity is not only an economic but a universal law. 
Wherever we turn in the broad domain of nature, there are 
the positive and negative, heat and cold, ebb and flow, gen- 
eral undulation. Excess leads to deficiency, and deficiency 
to excess. Things that are the most precious, when abused 
become the most obnoxious. Vibration is continuous both 
within and outside of human nature. The floods of spring- 
time are followed by the droughts of summer. After ac- 
tivity comes rest; after elevation, depression; after light, 
darkness. 

If we soar above the normal business level at one time, 
we will certainly fall below it at another ; and the higher 
the flight the greater and more rapid the fall. The most 
severe panics are generally preceded by intense activity and 
speculation. The clouds may be slow in gathering, but 
when they break, like a tliunder-storm, they clear the 
atmosphere. 

Every one is aware of alternations of what are popularly 
known as " good times " and " hard times." But many 
overlook the fact that they are governed by fixed laws, and 
regard them as matters of chance, or, at least, as the result 
of some political or monetary circumstance which has but 
little to do with their advent. 

A panic is a fright or loss of confidence in the stability 
of existing conditions. There are gradual panics, though 
the term is more exclusively applied to those which are sud- 
den and unexpected. The antecedents of a depression may 

197 



198 THE POLITICAL ECONOMY OP KATURAL LAW. 

be vital and adequate, or possibly exist only in the fancy or 
supposition of disaster. An alarm of fire in a public gather- 
ing may cause a stampede, even if it have no basis of fact. 
The panic is in the people. But financial alarm is usually 
the result of causes which give a reasonable ground for 
apprehension. 

Until human nature is evolved to a higher plane there 
will be flood and ebb tides in the turbulent sea of finance. 
This would still be true under the most ideal political and 
monetary system that can be imagined. The feverish desire 
to get much for little, to gain profit by a short-cut, especially 
where there are easy facilities for credit and speculation, al- 
ways leads directly to overtrading which is the sure precursor 
of shrinkage and disaster. The modern facilities for mak- 
ing large transactions by the deposit of small sums called 
"margins" furnish a powerful enticement for unhealthful 
expansion. Artificial attempts to ''bear" or "bull" the 
market lead many into financial deeps until they are 
submerged. People are never quite prepared for the 
arrival of a panic, and to many it comes like " a thief in 
the night." 

Overtrading may take place in real estate, stocks, wheat, 
or tulips. Commodities are only the tools or instruments 
which are made use of to gratify the desire for rapid and 
abnormal gain. It is not legitimate industry and commerce, 
but unhealthful speculation, that brings disaster. 

The fundamental and primary condition which results in 
panic may be expressed in one word, — debt. In itself, debt 
is not necessarily an evil, but its abuse leads to disaster. 
An experience of profit leads to larger ventures, and these 
being successful to still larger, until both individual and 
collective indebtedness grow to great proportions. When 
the crisis comes, all want what is due to them, and but few 
are able to respond. Money becomes scarce and abnormally 
valuable, and productions unsalable, except at great sacri- 



ACTION AND REACTION, OR " BOOMS " AND PANICS. 199 

fice. Business is therefore paralyzed; for all are anxious 
to sell, and none Avish to buy. No human prudence can 
entirely provide against these convulsions, hut a study of 
their laws and causes may do much to mitigate their sever- 
ity. A money market always even and in perfect health 
would imply the prevalence of an almost infallible wisdom, 
which is nowhere found. 

In times of business activit}', the fuel is gradually gath- 
ered, stick by stick, and added to the pile which is to pro- 
duce the coming conflagration. "When the conditions are 
ripe, only a spark is necessary to bring general disaster. 
The proud fabric which has been gradually rising, the sta- 
bility of which was unquestioned, is dissolved with appall- 
ing suddenness. 

The tulip mania in Holland, which occurred in 1636-7, 
is a striking illustration of the possible intensity of baseless 
speculation and succeeding panic. A single root Avas sold 
for thirteen thousand florins. The ownership of a rare bulb 
was often divided in shares, and many were sold for future 
delivery by people who did not possess them, and often the 
article sold was not in existence. The crash came without 
warning, and was most disastrous and complete. The re- 
sult was not due in any degree to bank-note expansion, as 
Holland at that time had only a coin currency. 

Laiidable undertakings if overdone may issue in panic. 
The London South Sea Bubble, and some of the railroad 
panics of America, are examples. They are an evil Avhich 
no monetary system, however sound, can prevent, and gov- 
ernmental measures are also futile to avert them. With 
the natural human desire for rapid gain, and convenient 
facilities for speculation, overtrading is a sure result. It 
is a peculiar feature that those most actively engaged are 
less capable of judging of the danger, and the probable time 
of culmination, than those who look on from the outside. 
An observer, even in another country, will often discover 



200 THE POLITICAL ECONOMY OF NATUEAL LAW. 

signs of approaching catastrophe which are overlooked by 
active participants. 

As a rule, important panics are preceded by several 
years of prosperity which at length reaches a feverish and 
unhealthy stage. Industry and economy are at a discount, 
and slow gains unsatisfactory. Production diminishes as 
speculation increases. Banks expand their circulation and 
discounts, and individual and public credits are enlarged. 
Confidence is strong, and profits rapid and large. But at 
length a day of reckoning comes. Some unexpected weak 
spot in the financial edifice gives way, and every part comes 
down, as a row of standing bricks are levelled by the fall 
of one. Distress, bankruptcy, and liquidation follow ; and 
after a few months, or years, the rubbish is cleared away, 
and a slow and tedious process of recuperation sets in. 
Economy again becomes the rule, and extravagance the 
exception. If the pendulum swings far in the direction of 
wild speculation, it will go with an equal momentum to the 
side of depression and stagnation. 

Our most notable panics occurred in the years 1822, 
1837, 1857, 1873, and 1893. Others of much less intensity, 
and somewhat different in character, occurred in 1861, 1866, 
1884, and 1890. That of 1837 was, perhaps, the most severe 
of all in its immediate results, and the most lasting in its 
effects. Ten years passed before values fully recovered and 
business resumed its normal activity. The principal ante- 
cedents were a great expansion of banking and bank credits, 
and an intense speculation in real estate, especially in New 
York City. In 1830 there were three hundred and twenty- 
nine banks in this country, with a capital of $110,000,000. 
In 1837 they had increased to seven hundred and eighty- 
eight, with a capital of $290,000,000. Prices of all com- 
modities advanced rapidly, and industry and frugality were 
at a discount. Many abandoned agricultural pursuits and 
removed to towns or cities, to speculate in real estate and 



ACTION AND REACTION, OE " BOOMS " AND PANICS. 201 

enjoy their rapidly increasing riches. At length the climax 
was reached, and the succeeding crisis occurred on May 10, 
1837. Careful estimates subsequent^ made, showed an 
actual shrinkage of two billions in the value of the assets 
of the country, and an amount of indebtedness of six hun- 
dred millions wiped out by actual bankruptcy. Complete 
specie resumption by the banks in all the States did not 
take place until 1843. Thousands who thought themselves 
wealthy lost all, and had to make a new beginning without 
a dollar. Labor was a drug, and all property unsalable 
except at ruinously low prices. Values sunk as much too 
low as they had before been too high. Kecovery was slow 
and difficult. It required years of toilsome effort to ascend 
the same hill that had been descended at a single leap. 

The panic of 1857 was, perhaps, next in severity, and 
the preceding conditions were similar. The influx of gold 
from California, after its discovery in 1848, was added to 
other speculative elements, and its effect was to intensify the 
passion for rapid gain. The severe object lesson of twenty 
years before had been forgotten, and history repeated itself. 
The prostration was not as severe, and the recovery more 
rapid than before; but yet the disaster was great, and 
thousands of fortunes were swept away. The suspension 
of specie payments by the New York banks, however, lasted 
only fifty-nine days. Recovery to the normal standard of 
business and prices was not quite complete in 1860, when 
the great political events occurred which led to the civil 
war of 1861. The opening of hostilities produced violent 
changes and irregularities in our banking system, which 
precipitated a crisis in the currency. This was quite 
unlike the panic of 1857, and less severe. The bonds of 
various Southern States had been largely used in the North 
as a basis for bank circulation ; and as their value rapidly 
declined, great confusion in our monetary system followed. 
Financial operations and exchanges were much disturbed, 



202 THE POLITICAL ECONOMY OP NATUEAL LAW. 

until the exigencies of tlie war forced the government to 
issue the greenback currency, which soon took the place of 
State bank issues. "We are dealing with principles, and not 
with history, and will only briefly notice these monetary 
changes and their effects. As the war |)i'ogi'essed, . the 
redundancy of paper currency increased, and soon caused it 
to sink below a gold basis. This movement grew still more 
pronounced when the national banking system was inaugu- 
rated, which was another outgrowth of the financial needs 
of the government. It was devised to aid in making a 
market for government bonds, which were made a basis for 
national bank circulation. These issues, added to those of 
the government, caused a still further depression from a 
specie basis, until at one time their value was less than 
half that of gold. A corresponding inflation in all prices 
occurred, as rapidly as an adjustment could take place, and 
speculation was the natural accompaniment. As the vol- 
ume of currency increased, its purchasing power diminished. 
Supply and demand must come to an equilibrium. There 
was, however, but little change in prices when measured 
by the gold standard, the apparent increase in values being 
in reality fictitious and artificial. Those who were saga- 
cious enough to keep their assets largely in commodities 
during the expansion profited, in case they turned them 
into money before the contraction. Thus, we meet the law 
of supply and demand at every turn, always uniform and 
supreme. The legislation of the " Medes and Persians " 
could not excel this princijple in unchangeableness. The 
quantity of circulating medium in any country has a direct 
relation to the price of its commodities. 

The circumstances preceding the panic of 1873 were 
somewhat different from those before noticed. Its most 
prominent cause was an abnormal amount of railroad build- 
ing. This is a laudable business, but it is quite possible 
to overdo it. There was also an unusual amount of real- 



ACTION AND REACTION, OR " BOOMS " AND PANICS. 203 

estate speculation, and consequent inflation of prices. 
Whatever single feature may be the direct cause of any 
panic, its effects spread to other enterprises, even if entirely 
different in character. As a consequence, other values 
suffered nearly as much as those of railroad stocks. 

By means of debt and inflation, current values of fixed 
forms of property become too great in proportion to the 
existing volume of money. The disparity increases until 
panic comes, which consists of an excited bidding for 
money by those who must dispose of surplus property. 
In their competition for money they offer an increasing 
quantity of commodities for it, Avhich is called a fall in 
prices. A given sum in this way becomes more valuable, 
as measured by other property, in accordance with supply 
and demand. 

Alternations of prosperity and adversity will come at 
intervals, even if the currency, tariff, and all other condi- 
tions were the most perfect that could be devised. No 
matter how liberal the amount of the monetary medium 
may be, when like a flood-tide the fever of speculative 
enthusiasm sweeps beyond its normal limit, general appre- 
hension comes, and the inevitable ebb follows. Panics seem 
to come from a lack of money, because it is hard to get — 
relatively dear — during such periods. The real difficulty, 
however, is the lack of confidence. Even with an unpre- 
cedented volume of existing currency, when confidence is 
destroyed money is hoarded so that the supply appears to 
be utterly inadequate. At such times there is a general 
indisposition to invest and even to pay obligations in the 
usual way. People seem seized with the impression that if 
they pay out what money they have they will never get 
any more. The difficult}^ is located in human fallibility 
and not in external conditions. 

Disaster generally comes more from anticipated trouble 
than from that which is actually present. Future condi- 



204 THE POLITICAL, ECONOMY OF NATURAL LAW. 

tions are discounted in Wall Street as freely as promis- 
sory notes. Sentiment is often as powerful as fact in the 
regulation of values. Is this due to chance rather than 
ISlatural Law ? jSTot at all, for sentiment is a natural law 
in the human constitution. It is a complex blending of 
tendencies both within and outside of man that constitutes 
political economy. 

Rarely are panics siich unmitigated calamities, or booms 
such blessings, as they are painted by the human fancy. 
They have wrapped up in them self-regulative forces which 
in due time make their power visible. 

When everybody is buying it is time to sell, for such a 
condition cannot continue. The reverse is equally true. 
When under the influence of a common impulse to sell, 
values seem to have no bottom, the wise investor will profit 
by the acquisition of sound properties. 

The panic of 1890 was only an echo, though a startling 
one, of the collapse of the great house of Baring Brothers 
in London. While not accompanied by any distrust of the 
currency, it caused an important shrinkage in values and a 
general stagnation which was slow to mend. Financial 
disturbances in Australia and South America also cast 
their shadows over the United States and caused a con- 
siderable withdrawal of English investments, all of which 
tended to retard recovery. An unhealthf ul over-capitaliza- 
tion and speculation in " industrials " also prevailed between 
the panics of 1890 and 1893. With that partial exception, 
the great panic of 1893 was not preceded by the unwhole- 
some inflation in values which usually forms the antecedent 
of violent disturbances. 

The panic of 1893 was distinctly a currency panic. At 
first glance it would seem anomalous that such a disturb- 
ance should come at a time when the volume of currency 
was unprecedentedly large and constantly increasing. But 
the inception of the disaster had to do with its quality 



ACTION AND REACTION, OK " BOOMS " AND PANICS. 205 

rather than its quantity. The coinage of 420,000,000 of 
silver dollars of the sixteen to one standard, during the 
period from 1878 to 1893, resulted in a depreciation of their 
bullion value of $175,000,000, or about forty per cent. To 
this already overweighted currency there was added the 
monthly coinage of depreciated metal provided for by the 
'' Sherman law," whicli was causing a steady and j)ersistent 
inflation. During the early part of 1893 an extensive out- 
flow of gold on foreign balances increased the general 
apprehension. The redemptive gold reserve was depleted; 
and serious doubts prevailed, both in Europe and America, 
as to the ability of the government to maintain the parity 
of gold and silver. A great drop to a silver basis seemed 
to be impending. 'From the nominal ratio of sixteen to 
one, the bullion value had changed to twenty-eight to one. 
Tills state of affairs led to the return from Europe of large 
amounts of American stocks and bonds, to be realized upon 
before the apprehelided change shoijld take place. The 
strained situation also led to a general hoarding of gold, 
■ which caused a sudden contraction and further loss of con- 
fidence. Euns on banking institutions began, and fears of 
general disaster culminated in such a contraction that cur- 
rency in small denominations commanded a premium of 
three to four per cent. There was, in reality, plenty of 
currency but even more distrust. As money and coinage 
are more fully considered in a special chapter, these points 
are only briefly touched upon in this connection as directly 
bearing upon the notable panic of 1893. 

The repeal of the silver purchasing clause of the " Sher- 
man law," Nov. 1, 1893, by the Congress which was con- 
vened for that special purpose, restored confidence and 
assured the commercial world that the existing volume of 
silver coin would be maintained on a parity with gold. 
This could only be done by a free exchange of the more 
precious metal for silver coin whenever demanded. Inter- 



206 THE POLITICAL ECONOMY OF NATURAL LAW. 

changeability is absolutely necessary to the continuance of 
equality. 

The panic of 1893 was unique in its inception, charac- 
teristics, and outcome. It was also peculiar in the fact 
that legislation was required as a remedial measure. Pre- 
vious faulty legislation had produced the disturbance, and 
its repeal was therefore required to allay it. 

The economic relations between the leading commercial 
nations are now so intimate and responsive that any finan- 
cial disturbance in one sends its corresponding vibrations 
through all. 

It is probable, however, that the panics of the future 
will be less severe than those of the past. Present business 
methods and conditions make it improbable that such con- 
vulsions as those of 1837 and 1857 will again occur. Eapid 
communication tends powerfully toward world-wide even- 
ness of prices, and promotes the gradual discounting of 
what would otherwise be violent fluctuations. There is 
also a growing sentiment against excessive individual in- 
debtedness, and business is more generally conducted on a 
cash basis. International commerce also conduces to steadi- 
ness of prices, and any abnormal prosperity or dej)ression in 
one country receives a corrective influence from others. 
There is a better understanding of ISTatural Law, and a more 
general appreciation of the certainty of the penalties for its 
violation. "When all are familiar with unerring natural 
principles, and have confidence in their continuous opera- 
tion, they will become less susceptible to such impulses as 
issue in a financial crisis. When exciting and disquieting 
rumors prevail, even the strongest will sometimes lose their 
equanimity. Anything like a stampede in the financial 
world is disastrous. Peassuring influences are very neces- 
sary at such times. Often a firm and united stand taken 
by the banks, with mutual assistance when necessary, 
accompanied by a temporary increase of circulation, or an 



ACTION AND REACTION, OR " BOOMS "" AND PANICS. 207 

issue of clearing-house certificates, will alleviate the worst 
features of an economic convulsion. A subsequent steady 
and slow contraction on the part of the banks, after the 
excitement subsides, will generally take place, to conform 
to the changed business conditions. The greatly increased 
general foresight in determining the fixture tendency of 
market prices will do much to prevent any repetition of 
severe panics, for dangers foreseen can be largely avoided. 
Steady and even markets do not present good opportunities 
for speculation and rapid accumulations by the unscrupu- 
lous, but are favorable for labor and all legitimate business 
and industry. 



MONEY AND COINAGE. 



" For what is worth in anything 
But so much money as Hwill bring ? " 

Butler. 

^^ Money alone sets all the loorld in motion.'''' 

PUBLIUS. 

" The love of money is the root of all evil.''"' 

1 Timothy vi. 10. 



" Eemember that time is money.'''' 

Franklin. 



" Silver and^gold are not the only coin; virtue too passes cur- 
rent all over the loorld.'''' 

Euripides. 



" J^ is a condition which confronts us — not a theory.'''' 

Grover Cleveland. 

''Gold! Gold! Gold! Gold! 
Bright and yellow, hard and cold.'''' 
f Hood. 



XVIII. 
MONEY AND COINAGE. 

There is perhaps no other department of economics 
where so many and diverse theories prevail, as in that 
whicli pertains to the monetary circulating medium. The 
endless profusion of papers, opinions, and Congressional 
speeches that have been put forth by impracticable theorists 
during the recent past, tends to muddle and complicate prin- 
ciples which in themselves are natural and simple. Preju- 
dice, partisanship, and supposed sectional interests color 
personal opinion, and the result is seen in distorted and 
fragmentary views of natural unchanging principles. An 
imagined diversity of interest of sections and parties is 
fatal to a search, after truth, for that is ahvays unitary. It 
would be as absurd to suppose that the same cause could 
produce health in the right side of the human organism and 
disease in the left, as to believe that any monetary policy , 
could at the same time have a prosperous and adverse effect 
in ditferent parts of one nation. Diversity of interest is 
only on the surface. 

It is obviously beyond the scope of this work to consider 
technically, in a single chapter, a subject that alone would 
till a larger volume if exhaustively treated. Historical and 
statistical aspects are of interest to the student of economic 
science, but the average reader will find more profit in a 
concise study of inherent and fundamental principles. Let 
us make a judicial search for the uncolored truth. 

What has Natural Law to do with money and coinage ? 
Does it give any indication as to the kind and quality of a 

211 



212 THE POLITICAL ECONOMY OE ISTATUEAL LAW. 

normal or ideal currency ? Does it shed any liglit upon bi- 
metallism or monometallism, gold, silver, nickle, or copper ? 
Yes, it touches these questions on every side. 

The present circulating medium is the result of a long 
evolutionary process. In Colonial times tobacco was a legal 
tender currency in Maryland and Virginia. In other colonies, 
coon skins, beaver skins, and musket balls were extensively 
used as money. As late as 1866 hand-made nails passed 
current in some of the secluded villages of France. From 
1785 to 1787 a limited coinage of cents and half cents was 
made by private parties in several States under the authority 
of legislative Acts. In 1786 Massachusetts passed an Act to 
establish a State mint for the coinage of cents and half cents. 
The United States mint was not established until 1792. 

It is natural that there should be some current represen- 
tative of value. The most perfect system of barter is un- 
suited to any condition above the plane of barbarism. Money 
represents stored-up labor, otherwise it would be valueless. 

Conceding the necessity of a currency, what should be 
its qualities ? The most important requisite is stability of 
value. So far as is possible, it must be rendered indepen- 
dent of fluctuation in value and volume. To have a cur- 
rency constantly liable to grow cheaper or dearer, either 
through the changing temper of legislation, or variations in 
the bullion value of metals, is prejudicial to legitimate 
industry and commerce. 

Steadiness being the great desideratum of an ideal cur- 
rency, what are its factors ? Objectively they are two, and 
they are often so blended that a distinct line can hardly be 
drawn between them. The first is the intrinsic, or natural 
element — which consists of the stored-up labor embodied 
in bullion — and the second is the fiat of legislation. 

An illustration of the natural element is found in the 
early history of California. Immediately subsequent to the 
gold discoveries of 1849 the currency consisted of that 



MONEY AND COINAGE. 213 

metal, first in the form of dust, and afterwards of private 
assay put in the general form of coins. The stamp of well- 
known and responsible firms upon a piece of gold of regu- 
lation weight and fineness made it locally current as a 
monetary medium. Being of equal bullion value with 
governmental coinage, it circulated for some time side by 
side with it, until a full supply of the latter finally dis- 
placed it. It was not a counterfeit, for it did not resemble 
the national issues, but having a full natural value it did 
not require any of the artificial or fiat element. 

The governmental stamp upon a disk of metal is merely 
a certificate of its weight and fineness. In itself it adds 
no value except as it confers the privilege of an inter- 
change with something else of higher value. For example, 
the present silver dollars of the United States, even though 
bearing the official device, Avould soon sink to their natural 
value were not the public honor pledged to keep them at a 
parity with gold through interchangeability. So long as an 
inferior thing can be freely exchanged for a superior, it will 
be its equal through tlie aid of an artificial element, ivhich 
consists of that pvui'derje. 

Some would-be political economists place great stress 
upon the artificial element in currency, and consider the 
governmental fiat fully adequate to create value. Xot so. 
A purely fiat currency might have some value by being 
made receivable for national dues ; but lacking a redemptive 
basis, it could never be otherwise than artificial and uncer- 
tain. Unless kept in very restricted volume, it would 
invariably depreciate from the real monetary standard. It 
would lack any solid commercial foundation. Value must 
be earned, and cannot be created even by a great nation. 
It must possess stored-up labor. It is value only from the 
fact that it costs something. 

The precious metals, on the basis of natural cost and gen- 
eral demand, have the same value throughout the commer- 



214 THE POLITICAL ECONOMY OF NATURAL LAW. 

cial world, but within the limits of different governments 
the artificial element of legislation, or legal-tender value, 
is blended in varying degree. But this is all eliminated, 
and cuts no figure, in international commerce and exchanges. 

It may be admitted that the same volume of currency 
changes in potency in special seasons of prosperity or ad- 
versity ; but this is not the fault of the money, but of the 
uncertain moods of humanity. 

Besides the two objective elements of value — the nat- 
ural and artificial — already noted, there is also a very 
important subjective factor known as confidence. It is an 
invisible currency in itself, for it pieces out that which is 
in sight. It is never lacking in its connection with natural 
value, but it fluctuates greatly in its combination with that 
which is legislative or artificial. Its scarcity often proves 
a greater calamity than the actual deficiency of its material 
counterpart. 

In times of panic and depression, superficial observers 
locate all the ills in the lack of a sufficient circulating 
medium, while often the onhj want is confidence. People 
are doubtful about the stability of the artificial conditions. 
When there is an apprehension that the existing grades of 
cheaper money, whether silver or paper, may break away 
from an equality with the standard, in spite of the efforts 
of the banks or government, there is a cxirre-ncy panic. Con- 
fidence is the barometer that is always testing the future of 
the artificial element in money. 

In more primitive times, owing to permanent distrust, 
transactions were at once closed with real rather than 
representative money. But with the growth of the modern 
commercial spirit and a higher civilization, there has been 
a great and continuous increase of confidence. This has 
formed a basis for credit, through the use of which both 
domestic and international commerce has enormously in- 
creased. It has also furnished a field for the universal 



MONEY AND COINAGE. 215 

use of bills of exchange, drafts, checks, and other repre- 
sentatives of real money. So long as there is no doubt in 
regard to ultimate redeniptability, almost an unlimited 
amount of business can be transacted with monetary repre- 
sentatives. But with the prevalence of any unsound finan- 
cial theories, of present or prospective faulty legislation, 
or of any sort of departure from conservative solidity as 
to basis, apprehension begins, and real money is demanded 
because its representatives are distrusted. This leads to 
panic and subsequent stagnation, as illustrated in 1893. 
With an undoubted currency and a prevailing sense of 
moral trusteeship in corporate management, " good times " 
would be perpetual. Confidence forms the key-stone in the 
arch of prosperity. 

The more perfect the banking system and the sounder 
the financial policy of any country, the greater is the 
amount of business that can be transacted on any given 
reserve of real money. The balances settled in a single 
week at the New York Clearing House are often more 
than the entire circulating medium of the nation. 

The world's international currency — which represents 
gold — consists of bills of exchange ; that of domestic whole- 
sale trade and banking transactions, of drafts and checks, 
and even of the domestic retail trade only a small part is 
transacted by the means of real, or basal money. 

The evolution of the banking system of the United 
States during the last thirty-five years has been remarkable. 
With all the existing popular prejudice against national 
banks, they are a vast improvement over any system of the 
past. It is true that the amount of governmental bonds 
which forms their basis is diminishing, so that some im- 
portant modifications may be necessary in the near future, 
nevertheless they have served a great purpose. 

Previous to the civil war there were as many kinds of 
currency as there were States. The bank issues of many 



216 THE POLITICAL ECONORIY OF NATURAL LAW. 

sections were uncurrent outside of their own sectional 
territory, and only salable to brokers at a discount. In 
many cases tbeir security was precarious, tlie chances for 
redemption in any considerable amount doubtful, and their 
ultimate valuation problematical. Counterfeits were numer- 
ous and difficult of detection, often requiring the services 
of an expert. The direct losses to holders of this heteroge- 
neous currency amounted to millions yearly, to say nothing 
of the general business derangement which resulted. 

The present uniform value of the ISfational bank issues 
throughout the length and breadth of the country, the posi- 
tive security to bill holders, even in the case of occasional 
bank failures, and the immunity from counterfeits, alto- 
gether form a striking contrast with former conditions. 
Whether or not this system will gradually be superseded by 
national issues and a sub-treasury plan, is not a vital ques- 
tion in its relation to Natural Law. Circumstances alone will 
determine the relative preponderance of the two systems. 
Both accord with sound principles so long as an adequate 
reserve of standard money is pledged to their redemption. 
Under either system sharp fluctuations in the volume of 
the circulating representatives of money must be avoided. 

National banks are considered as a " monopoly " by some ; 
but so long as they are organized under general laws and 
not special ''Acts," it is difficult to see the propriety of 
such a characterization. The fact that there is some volun- 
tary retirement among them, and that their average divi- 
dends do not now excel other well-managed enterprises, 
does not comport with popular impressions regarding their 
exceptional advantages for profit. Iconoclasm is sometimes 
useful, but a disposition to pull down tested institutions with 
the idea of replacing them with financial vagaries is unwise. 

Turning from money in its broad sense to basal money 
— or coin — we find that through the entire historic period 
gold and silver have been the chosen embodiments of value 



MONEY AND COINAGE. 217 

among nations of any considerable degree of civilization. 
Natural selection has taken them from among the metals 
for such a function because the labor involved in their pro- 
duction renders them both scarce and precious. This con- 
fers large value in compact form — more especially in the 
case of gold — and it is further enhanced by their beauty 
and comparative incorruptibility. Their practical utility, 
however, in hand-to-hand transactions is still limited by 
Aveight and bulk as -compared with their available represen- 
tatives. The important abrasion of gold is also a serious 
obstacle to its constant use. The coined metal, therefore, 
mainly rests in bank vaults or depositories, while its more 
portable agents — printed notes — perform its function. In 
modern commerce, however, its office is still more largely 
delegated to checks, drafts, and bills of exchange. These, 
though temporar}', are representatives of current money, 
as bank notes are representatives of real money, or stand- 
ard coin. The active office or duty of coin is therefore 
almost entirely delegated. 

There are two different Avays of measuring the value of 
money. One is by the varying amount of products that it 
will command, and the other by its degree of usefulness 
as shown in the current rate of interest. The fallacious 
theory that, owing to the lessening use of silver, the exist- 
ing currency of the world is growing dearer, is doubly re- 
futed. First, by the increasing amount of average products 
that it will command, and, second, by the very important 
decline in the rate of interest. The latter in any free 
market represents the general consensus of opinion as to 
its desirableness and possible utility. Interest could not 
decline if money were not relatively more plentiful. Bids 
for the use of money must be as exact and conclusive as 
rentals offered for houses or farms. Supply and demand in 
each and all cases is the arbiter. As indicated by the dual 
test of products and interest, the circulating medium, of 



218 THE POLITICAL ECONOMY OF NATURAL LAW. 

whatever composed, has been steadily growing cheaper. 
The same is true as measured by wages, taking the average 
of all grades. These facts are noted in refutation of some 
popular prevailing sectional theories. 

Assuming that gold and silver compose the normal and 
universally accepted coin-currency, what is the teaching of 
Natural Law concerning them? First, that in reality there 
cannot be two standards, any more than there can be two 
yardsticks. Bimetallism is often regarded as implying 
two standards, but it only signifies two metals. Bimetal- 
lism is a rational and practical accomplishment, but two dif- 
ferent sized measures are mathematically impossible. As 
well different-sized bushels, or lighter and heavier pound 
weights. To keejD the distinction between two metals and 
two standards clearly in mind, will aid in the study of this 
much-befogged problem. 

Natural Law and evolution would indicate that with the 
immense modern accumulation of wealth and the greatly 
augmented volume of commerce, there would be a corre- 
sponding tendency toward a more valuable and concentrated 
monetary basis. Among barbarous tribes the currency is 
composed of beads and shells ; and, as ascending steps in 
civilization are taken, iron, copper, nickel, silver, and gold 
come respectively into relative use in an advancing order of 
value. Evolution is a universal principle. Things that are 
cumbersome and inefficient are continually being displaced 
by those of greater perfection. There is really nothing 
more strange or revolutionary in the basal substitution of 
gold for silver, than in that of electricity for horse-power, 
or railroad service for that of the stage-coach. Where 
wages are not more than ten or fifteen cents per day, as in 
China, small copper coins of trifling value can still be util- 
ized ; but with the advance of values and civilization, im- 
proved tools and instruments are a natural accompaniment. 

The ratio of valuation between gold and silver bullion 



MONEY AND COIXAGE. 



219 



has vibrated somewhat during the whole historic period, 
but never before has the divergence been so wide as at the 
present time. As in every other department, the relations 
are entirely governed by supply and demand. 

Herodotus estimates the ratio of gold to silver as 1 to 
13, Plato as 1 to 12, Menander as 1 to 10, and in Caesar's 
time it was 1 to 9. For some time previous to the discov- 
ery of the rich silver mines of Potosi, in the sixteenth cen- 
tury, the ratio was about 1 to 11;^, and in the early part of 
the seventeenth century, 1 to 12i. In the present century, 
previous to the great gold discoveries of California, it was 
between 15| and 16 ; and afterwards, in spite of the enor- 
mous increase in gold, it only fell back to 15.41. 

The following table, estimated from reports of the Mint 
Bureau, will show the remarkafte change in the ratio of 
gold and silver that has taken place since 1873 : — 



CALENDAR 
YEAR. 


VALUE OF FINE 
OUNCE AT AVER- 
AGE QUOTATION. 


BULLION VALUE 

OF C. 8. 
SILVER DOLLAR. 


GOLD 
RATIO. 


1R73 


SI. 30 


$1,004 


15.9 


1874 


1.28 


.989 


16.2 


1875 


1.25 


.96 


16.6 


1876 


1.16 


.89 


17.9 


1877 


1.20 


.92 


17.2 


1878 


1.15 


.89 


17.9 


1879 


1.12 


.869 


18.4 


1880 


1.14 


.886 


18 


1881 


1.14 


.886 


18 


1882 


1.13 


.878 


18.2 


1883 


1.11 


.868 


18.6 


1884 


1.11 


.868 


18.6 


1885 


1.06 


.82 


19.4 


1886 


.99 


.769 


20.8 


1887 


.98 


.757 


21.1 


18S8 


.94 


.727 


22 


1889 


.93 


.72 


22.3 


1890 


1.05 


.809 


19.7 


1891 


.99 


.76 


20.9 


1892 


.87 


.67 


23.7 


18931 


.81 


.625 


25.5 


18932 


.71 


.56 


28.4 


1 


. Average first 8 months. 2. November 1st 





220 THE POLITICAL ECONOMY OF NATUEAL LAW. 

The remarkable change as shown above is due, not only 
to the recent discoveries of enormous deposits of silver, 
but also to the discontinuance of silver coinage by the 
leading nations of Europe, and recently by the United 
States. Germany discontinued silver coinage in 1870, at 
the close of her war with France, and gradually put her 
enormous stock of that metal upon the markets of the 
world. This was like taking a heavy weight from one 
scale of a balance and placing it in the other, thereby 
doubly changing the relation. The Latin Union also joined 
in the same movement, and the departure of silver from its 
nominal and legislative ratio became more and more pro- 
nounced. For some time prior to the action of the United 
States in 1893, Europe was virtually out of the market for 
silver bullion for coinage*purposes. The currency panic 
of 1893 was caused by the apprehension of the inability of 
the United States to maintain a parity even under limited 
coinage provided for under the '' Sherman law." 

The Old World for three years had been returning our 
securities, fearing that a drop to a silver basis might be 
imminent. Thus the crisis came, not because of too little 
money, but from the fear that an increasing redundancy 
might at any time result in depreciation. Every one 
wished to stand from under what was impending. The 
world-wide trend was yet further indicated by the fact that 
India, which had always furnished a very extensive mar- 
ket for silver, joined in the general movement for a gold 
basis in the autumn of 1893. 

It has for some time been evident that nothing less than 
a general international agreement would so increase the 
demand for silver as to gradually close the great chasm 
which now exists between its actual and nominal value. 
But it is even doubtful whether or not a great international 
combination would be able to permanently restore the 
former ratio. Should it at once make the effort to artifi- 



MONEY AND COINAGE. ' 221 

cially raise silver so miicli above its natural level, the 
production of that metal ^vould be immensely stimulated. 
It is quite probable that in a few years the artificial would 
again have to yield to the natural. Even nations cannot 
prevent this. Furthermore, as has already been intimated, 
such a step would seem to be backward from an evolution- 
ary standpoint. 

It is doubtless possible to maintain a parity of gold and 
silver coin in the United States, so long as no further 
additions of the latter are made, and thus practical bi- 
metallism can be continued. But with any impairment 
of the public confidence, either as to the ability or intention 
of the Government to do this, a process of gold-hoarding 
could not be prevented. A minority in Congress, who with 
great persistence advocated the '" free and unlimited coin- 
age of silver," upon the former, or a slightly increased 
ratio, call themselves bimetallists, but it is dij&icult to see 
the propriety of such a designation. Such a measure 
would inevitably bring about silver monometallism. This 
■was so clearly apparent, even under the restricted coinage 
of the " Sherman law," that the panic of 1893 was the 
result. It is hardly necessary to suggest that the moment 
that gold commands any premium, either through appre- 
hension or real scarcity, it will cease to be currency and 
disappear. This would amount to a sudden contraction 
of the available circulating mediiim, but that would be 
but one of the many disasters which would result from a 
drop to a silver standard. 

No metal can really become a standard unless it pos- 
sesses international acceptability. There are no walls 
between nations, and the commercial world is virtually a 
greater unit. Under modern conditions different countries 
are neighbors, and no one can disregard the action of the 
others. 

The '• silver question " has no class, partisan, or sectional 



222 THE POLITICAL ECOKOMY OF NATURAL LAW. 

significance. Aside from tlie few owners of silver mines, 
the whole country would suffer and become financially dis- 
organized by a drop to silver monometallism. This is as 
true of the poor as of the rich ; of labor as of capital ; of 
the agriculturalist as of the manufacturer, and of Colo- 
rado as of New York. In cases of general inflation, as 
during the civil war, wages and salaries are always the 
last things to rise to the full proportion of material pro- 
ducts. A sound and stable financial system is advantage- 
ous to all sections. Any theoretic diversity of local inter- 
ests is the result either of demagogism or of ignorance. 

Suppose for the sake of argument that it would be a 
temporary advantage for a " debtor section " — if such can 
be truly said to exist — to pay its obligations in a cheapened 
currency, it would finally prove a very mistaken policy. A 
high credit is vastly more valuable than temporary profit if 
such were possible. This is particularly true of the newer 
States where capital is needed for development. The tem- 
per of public opinion as represented in the legislation of 
each State determines its credit and standing in the finan- 
cial world. It is for the interest of States to keep their 
credit so high that both they and their inhabitants can 
make loans at low rates of interest. Capital is attracted to 
such localities and becomes cheap and plentiful. Every 
degree of the element of doxCbt adds directly to the rate of 
interest in an increasing ratio. 

Nothing could be more lyerinanently harmful to the 
debtors of a State than special legislation which is theoreti- 
cally in their favor. 

It is often claimed, and with some plausibility, that 
within the last twenty years gold has grown abnormally 
dear at the same time that silver has been cheapening. 
But even if this were abstractly true, the practical fact 
remains that the general currency — which has gold for 
its basis — has cheapened. This was noted in the early 



MOISTEY AND COINAGE. 223 

part of this chapter as proved by the average advancement 
in products and wages, and also by the decline in rates of 
interest. With the great modern utilization of the various 
representatives of money, a vastly greater business can be 
transacted upon any given amount of the ultimate standard 
than in the past. In domestic commerce, coin cuts but a 
small figure, and in international transactions it is only 
used for balances. 

But the confidence in coin representatives, as to their 
ahility for redemption, must be unlimited. Confidence is 
the great " power house " of the business Avorld. If all 
distrust of the currency and of labor friction could at once 
be eliminated, an era of prosperity, natural and solid, would 
come to remain. 

If the present supply of gold is in any degree inadequate 
for the basal monetary standard, that fact will stimulate its 
production the world over. The available supply of the 
native metal is inexhaustible, and demand always brings 
supply. With scientific mining methods generally adopted, 
experts assert that the annual product can be speedily 
doubled. At the same time the cheapening of silver will 
greatly lessen its production, and this will prevent an in- 
definite continuance of the very rapid decline of the past 
decade. 

While but one monetary standard is possible, so long as 
the divergence between gold and silver did not amount to 
more than one or two per cent, a practical, though not a 
mathematical double standard apparently continued. But 
that time has past Avith no prospect of return. 

With gold as the basal standard — even with silver so 
greatly depreciated — a large volume of the latter can be 
floated and utilized at a parity. But the amount of silver 
must never become so excessive as to cause any doubt 
regarding their free interchangeability. The volume of 
inferior coined metal that can be utilized in any country 



224 THE POLITICAL ECONOMY OF NATURAL LAW. 

depends much upon the customs of the people. The exten- 
sive use of a silver coin currency among the peasantry of 
Erance enables that country to float a large amount per 
capita, while in the United States it cannot be extensively 
utilized except through its representatives. 

By Natural Law, there is but one way to provide for 
bimetallism in any country ; and that is to make the more 
precious metal the standard, and then float such an amount 
of the cheaper metal as can be kept upon an undoubted 
equality through free interchangeability. If an attempt be 
made to make the cheaper of two metals the standard, the 
dearer, under all possible circumstances, will disappear. 

Currency panics are inevitable if any element of doubt 
exists as to prompt redemption whenever required. With 
prevailing unimpaired confidence the only use of the coin 
standard is for redemptive reserves and foreign balances. 
It is like a yardstick that is only occasionally brought out 
to verify the professed length or width of fabrics. 

The principles regarding money and coinage that have 
been outlined are true because they are natural. With the 
elimination of the artificial elements that have been in- 
jected into the subject by sectionalism, partisanship, and 
one-sided aspects, difficulties vanish, and unity and har- 
mony are seen to be reasonable. 



TARIFFS AND PROTECTION. 



^^ Idleness and pride tax toith a heavier hand than kings and 

parliaments. If ive can get rid of the former^ we may easily hear 

the latter.'''' 

Fkanklin. 

He smote the rock of the national resources, and abundant 

streams of revenue gushed forth.'''' 

Webster on Hamilton. 

"J,?Z government — indeed, every human benefit and enjoy- 
ment, every virtue and every prudent act — is founded on compro- 
mise and barter.''^ 

Burke. 



XIX. 
TAEIFFS AND PEOTECTIOK 

A BRIEF study of the relation of tariffs to Natural Law 
seems proper, but any partisan or dogmatic treatment of 
the subject would be entirely foreign to the spirit and 
purpose of this work. Underlying principles can be in- 
telligently traced out only by an unbiased search for 
truth for its own sake. 

The formulation of a customs tariff is a work so com- 
plex and many-sided, that it requires both impartial and 
expert treatment, but even with the best of these the 
result is imperfect. A tariff is an elastic expression of 
national policy, and is based upon conditions which are 
constantly changing, therefore it has none of the exact- 
ness of Natural Law, though it has relations with it. 

As a question of party politics it is warped and twisted 
by the j^artisan press, and the average politician finds it 
difficult to see more than one side. Being purely a prac- 
tical economic problem, requiring the impartial study of 
the best financial and ethical talent, it is unfortunate that 
it has a political mask fastened upon it. Partisan preju- 
dice and expediency directly prevent the very thing most 
necessary — a calm and judicial study to determine the 
greatest good for the greatest number. So long as it 
continues to be a political shibboleth, prejudice rather 
than unmixed truth will be the determining feature. Op- 
posite aspects of the question are dwelt upon out of pro- 
portion, until the existing tariff, whatever it may be, to 
different observers, is made responsible for all prevailing 
good and all existing ills. Men of undoubted integrity 

227 



228 THE POLITICAL ECONOMY OP NATUEAL LAW. 

and patriotism almost become willing that the whole coun- 
try should suffer, in order that some party policy may 
be vindicated, political capital secured, and the opportu- 
nity afforded to declare, ^' I told you so." The " outs " 
attribute all calamities to the tariff of the " ins, " and too 
much or too little tariff is made the " scapegoat " for the 
sins of the nation. Few think of studying the subject 
until they put on a pair of partisan glassy. The "outs" 
feel that the salvation of the country depends upon their 
becoming "ins." Facts are made to bend to theories un- 
til they reach the snapping point. As a matter of scien- 
tific research, it would be interesting to determine by what 
mental process able and honorable men and newspapers 
on both sides become psychologized by party platforms 
and prejudices. Some great Republican, Democratic, or 
other political psychic wave rolls over the country and 
lifts men off their feet, and they become as children in 
its embrace. 

A customs tariff, whether higher or lower, is a less im- 
portant factor in a nation's welfare than is generally sup- 
posed. Business conditions are elastic, and are not long 
in adjusting themselves to a revenue system. But a very 
imperfect tariff which is permanent, and knoitm to be so, 
is preferable to any schedule which is prospectively change- 
able. One of the great drawbacks to commercial pros- 
perity is the almost continual apprehension of changes in 
the revenue system. 

All tariffs are artificial, and all are obstructions to the 
free courses of trade and commerce. While this is true, 
they may be expedient and politic. Aside from the protec- 
tive element, they are the most natural ways and means for 
raising a national revenue. They are less cumbersome and 
more popular than direct taxation, and in varying degree the 
foreign producer also contributes toward the desired result. 

Tariffs may be framed for revenue only, for revenue 



TARIFFS AND PROTECTION. 229 

with incidental protection, or for revenue and protection. 
If revenue onlij be desired, the object is most easily accom- 
plished by the imposition of duties upon articles of general 
consumption that are not of possible domestic production. 
For example, tea is incapable of home growth, and being an 
article of almost universal consumption, a very large revenue 
would be possible by the imposition of a moderate duty. 
As a revenue producer, a high tariff is often less success- 
ful than a lower one, because the former tends to limit 
consumption. 

Revenue with incidental protection would embrace ar- 
ticles of both domestic and foreign production, the prices of 
which are somewhat enhanced by the duties imposed. The 
protective element is the largest in the duties upon those 
things that are capable of unlimited home production, and 
that also are largely made elsewhere. The present tariff — 
1890 and 1893 — was designed both for revenue and protec- 
tion ; but as the revenue was ample when it was adopted, as 
a rule, articles incapable of home production come in under 
it free, or at nominal rates. 

As at present organized, the two great parties of the 
country — the Republican and Democratic — represent, re- 
spectively, distinct protection with revenue, and revenue 
with some incidental protection. This can only be taken as 
an average statement, as indicated by personal exponents 
and political platforms. In the Republican ranks, opinions 
are shaded from high to very moderate protection, and 
among Democrats from moderate protection to free trade. 

The brief study here proposed of a few fundamental 
principles underlying the revenue system is thoroughly un- 
partisan in intention. We think that each party places 
undue emphasis upon certain phases of this complicated 
and ever recurring problem. The importance of the ele- 
ment of American labor values is underestimated by many 
Democrats ; and, on the other hand, some Republicans 



230 THE POLITICAL ECONOMY OF NATURAL LAW. 

greatly overestimate the potency of a protective tariff, and 
forget tliat it is purely a policy, and lacks the basis of a 
universal principle. The question of an American tariff 
is only a question of American expediency. 

Could a commission of economic experts be formed with 
a single aim for justice and the public welfare, occupying 
an American standpoint, and uninfluenced by political ties 
and questions of party advantage, they would be able to 
outline a very perfect revenue system. But with existing 
partisan prejudice and unsound theory among legislators, 
and motives of personal, political, and sectional policy, the 
obstacles ^o an ideal result are great. Added to the difficul- 
ties already enumerated is the general fact that any tariff 
bill that can possibly receive the support of a majority in 
the Congress must naturally embody a general compromise. 

It may be noted, as a rule, that the adoption of any new 
schedule is generally fatal to the continuance in power of 
the party that is responsible for it. Numberless concessions 
and compromises have to be granted and a great variety of 
sectional interests placated. It thus becomes a system of 
shreds and patches, without consistent unity. As no section 
or interest gets quite all it asks, there is general dissatisfac- 
tion. Besides, the " outs " — whoever they may be — pick 
innumerable flaws ; and before time has permitted a thorough 
test, a reactionary wave results in a vacation for the domi- 
nant party. All this produces a restlessness unfavorable to 
business adjustment. A tariff, once intelligently adopted, 
should embody a flxed policy, to be depended upon. Under 
such a plan but few and slight modifications would be neces- 
sary during a decade. To make tariff-policy a party " foot- 
ball," is to sacrifice general prosperity to political vagaries. 
It cannot be denied that both parties share in the responsi- 
bility of keeping up this interminable unrest. 

The presence of the protective element in a revenue 
system can only be approved when there is some peculiar 



TARIFFS AND PROTECTION. 281 

local or national condition to be maintained. Without such 
a reason for its presence, it seems to savor of exclusiveness, 
if not of unfriendliness. Among the nations of Europe, in 
their relations to each other, there appears to be little valid 
reason for a protective accompaniment to revenue systems. 
Labor values and general conditions being not very unlike, 
any special measure of protection seems illogical. Protec- 
tion, in its nature being an artificial intervention, should 
always have a sound reason for its employment. 

Has the United States valid ground for some general 
system of protection, in connection with its duties for 
revenue ? From a purely cosmopolitan standpoint, no ; but 
from a national point of vieAv we think it has. The one 
reason why American protection should be moderately im- 
posed against the nations of the Old World, is involved in 
the question of labor-values. 

It is everywhere admitted that the average workman of 
America enjoys a distinctly higher standard of living than 
his European brother. As a rule, he is better educated, of 
higher tastes, accustomed to greater comforts and more 
privileges, therefore his requirements are enlarged. What 
will satisfy his foreign competitor will not satisfy him. 
The fact that he is a sovereign in a land of freedom and 
political equality, that he is not bound to any fixed class, 
and has individual aspirations, also enhances his material 
demands. Through the influence of superior environment 
he is on a higher plane than the eqvially skilled foreign 
producer. Can he be kept there without artificial aid ? 

The instruments that facilitate production, under the 
great advantages offered by modern transportation, are 
becoming very evenly distributed. Any important inven- 
tions or labor-saving machines, even if of American origin, 
are patented and utilized in European countries almost 
simultaneously with their appearance here. Raw materials, 
so called, are constantly approximating to general even- 



232 THE POLITICAL ECONOMY OF jSTATURAL LAW. 

ness of value. To offset the difference in transportation, 
the Old AYorld also has sorae advantages in lower rates of 
interest, more capital, organization, and specialization. A 
large number of our workingmen — now American citizens 
— came from the Old World ; but, though some conditions 
may be more favorable here, it cannot be claimed that a 
mere change of residence has materially increased their 
productive ability. In view of all these facts, there seems 
to be but one way to maintain a distinction, and that is, 
through reasonable though conservative protection. Water 
will gain a level unless some kind of a barrier prevents it. 

It is not probable, however, that in the absence of all 
protection, American wages would decline fully to' the 
European level, but they would approximate. A newer 
country, naturally affording greater opportunity and enter- 
prise, always possesses advantages for the workingman, 
other things being equal ; but as time passes, the gradual 
tendency is towards equalization. 

Suppose that two factories — one in Old and the other 
in New England — are producing the same kind of goods 
for the American market. The English proprietor with 
equal enterprise obtains all the most approved appliances, 
and his raw material is approximately of the same cost. 
But suppose the American proprietor pays his help two 
dollars per day, while the Englishman gets his for one. 
Can this continue unless the English product is made to 
contribute a part of the difference ? Such a disparity in 
labor value is constantly appearing in numberless forms. 
If all bars were taken down, could the American manufac- 
turer successfully compete with his foreign rival unless he 
be able to obtain labor at about the same price ? Having 
attempted to state the proposition fairly, we leave the 
solution to the reader's logic. 

But protection is neither a full panacea, nor a tool where 
the edge is all on one side. A bigoted protectionist is as 



TARIFFS AND PROTECTION. 233 

illogical as a free-trade doctrinaire. Protective measures 
must be employed with great care, otherwise they overreach 
their usefulness. There is alwa3^s difficulty in maintaining 
artificiality. Though the American market — embracing 
nearly 70,000,000 of the greatest consumers in the world — 
is of immense proportions, our manufacturers are constantly 
reaching out to demands that are world-wide. This pre- 
sents another phase of the question. To aid such enterpris- 
ing and laudable efforts, the duties upon necessary raw 
materials must be removed, or at least very delicately ad- 
justed. Principles of possible reciprocity should also be 
carefully considered. Xo general rules are possible, for 
among all artificial conditions each must be separately con- 
sidered upon its merits. The fact, too, that nations, like 
individuals, have their prejudices, should not be overlooked. 
Any tariff which seems partial or specially unfriendly is 
likely to provoke retaliation. The possibilities of a grow- 
ing reciprocity are worthy of the study of statesmen and 
economists. 

Does the agricultural producer lose by the slightly 
enhanced prices he may have to pay for certain products 
in consequence of their being moderately protected ? Not 
if the domestic market for the fruits of his own toil is 
broadened and improved, for this may more than offset 
the difference. 

No tariff in itself, however wisely constructed, will 
make " good times." In fact, unless it be intelligently 
adjusted, it may prove an unheal thful stimulant. If it be 
so abnormal as to cause any rapid and undue domestic 
expansion or over-production, severe reaction will ensue. 
A wholesome principle that is overdone becomes unwhole- 
some. This law should be borne in mind by partisans on 
both sides. There are so many silent and unseen compen- 
satory forces at work under any probable system of duties, 
that dogmatism upon the subject is unprofitable, Eadical 



234 THE POLITICAL ECONOMY OF NATUEAL LAW. 

differences among the most eminent and conscientious ob- 
servers attest its intricacy and complexity. It is not the 
creation of Natural Law, and that fact gives great room for 
theorizing. 

The subject of raw material has already been touched 
upon. But there is considerable difficulty found in an 
exact definition of that term. Wool is " raw material " to 
the manufacturer, but the farmer considers it as finished 
product. If it be made free, the wool-producer feels that 
he is brought into direct competition with cheap-labor 
countries, and therefore unfairly treated. Thus endless 
frictions crop out with any possible tariff. Every special 
industry, town, section, and State is dissatisfied unless its 
peculiar interests are specially considered. Thus, in the 
words of a former presidential candidate, the tariff becomes 
largely "a local issue." A coal producing section desires 
coal protection, while coal consumers urge its free entry. 
Trenton would like to see pottery well taken care of, and 
Patterson, silk, and so on indefinitely. 

Everyone is aware that there are two kinds of duties 
levied on imports, known respectively as specific and 
ad valorem. In many cases the two are combined, thus 
making the customs duties complicated and cumbersome. 
Specific duties are much more simple than those based 
upon valuation. Opportunities for inequality and even 
fraud are often found through inexact appraisement or un- 
der-valuation. Whether higher or lower, the simplification 
of the American tariff is in the highest degree desirable. 

As a matter of history, the protective principle has 
often been of practical benefit in the incipient stage or 
early development of special industries. Continued for a 
few years it has sometimes enabled them to grow from 
feeble beginnings to enterprises of great importance. In 
some such cases production has become so perfect that the 
necessity for its continuance has been outgrown. Consu- 



TARIFFS AND PROTECTION. 235 

mers have reaped a benefit by being able to get better goods 
at lower prices than would previously have been possible 
with free entry. 

A few of the general principles involved in the formula- 
tion of a tariff may be concisely hinted at as follows. Is 
the article capable of unlimited home production, so that 
domestic competition will protect the consumer ? If so, 
and not yet developed, will the temporary disadvantage of 
the consumer work to his interest in the long run ? If an 
article, like sugar for instance, is only capable of limited 
home production, it may be assumed that the consumer will 
have to pay all the tariff imposition, much the same as 
though it were all imported. In cases where the domestic 
production is large, but yet has direct com})etition Avith the 
imported article, the duty is virtually shared between the 
foreign producer and American consumer. Unless an in- 
crease of revenue is imperatively demanded, all articles 
incapable of domestic production should be upon the free 
list. The non-dutiable schedule should also be extended 
to include articles of limited domestic production that are 
incapable of becoming unlimited. With any practical or 
probable unlimited home production, the interests of the 
domestic consumer will be safe. Any special grades of a 
general article, as of wool, that cannot be produced at home, 
should come in free. 

If politics could be eliminated, it seems probable that 
in the light of sound economic principles, as briefly outlined 
above, an impartial tariff might be devised which, while 
not fully meeting sectional views and demands, would, on 
an average, be just to all. 

The fact should not be overlooked that the tariff is not 
responsible for the decline of special industries where there 
has been a change in natural conditions. For instance, the 
production and working of iron and steel have decaj'ed in 
some sections, not on accovmt of the tariff, but because cer- 



236 THE POLITICAL ECONOMY OF NATURAL LAW. 

tain localities, as Pittsburg and Birmingham, are able to 
bring ore and coal together at lower rates than are possi- 
ble elsewhere. Business will go to the cheapest producing 
points, and nothing can prevent it. As before suggested, 
all tariffs are obstructions, abstractly considered. If, in 
the future, national interests become broadened and univer- 
salized, the natural tendency will be toward a freer inter- 
national exchange of products. 



THE MODERN CORPORATION. 



" }\niile they are subject to abuses, they are great forces in pro- 
duction, and have their j)lace in the economic functions of society.^'' 

" Corporations cannot commit treason, nor be outlaioed, nor 
excommunicate, for they have no soulsy 

Sir Edwakd Coke. 



XX. 

THE MODERN COEPOEATIOK 

The corporation has been a mighty instrumentality in 
the evohition of modern social conditions. In the steady 
groAvth and diffusion of the peaceful arts and industries 
among men, especially in the accomplishments of the last 
few decades, its force has been paramount. We can hardly 
conceive of the universal paralysis that would touch every 
phase of modern social life, if we were suddenly thrown 
back to a condition of absolute dependence upon personal 
units. 

As the relation of the corporation to the shareholder 
is touched upon elsewhere, only its general relations to 
society, in the light of Natural Law, Avill here be 
considered. 

The merits and demerits of the present application of 
the corporate principle are the subject of much popular 
discussion ; and, here as elsewhere, in order to reach the 
bed-rock of logical truth we must discriminate between 
that which is normal and its prevalent abuses. 

Corporate operation is ubiquitous. Any effort to live 
independent of its aid would at once result in the most 
primitive conditions. It is an agency through which 
human accomplishment is not only mechanically, but 
vitally multiplied. It builds and operates our railroads, 
telegraphs, steamships, and factories, develops our mines, 
transports our persons and property, manufactures our 
goods, and gives employment to both labor and capital. It 
is peculiar to a high order of social and moral development, 

239 



240 THE POLITICAL ECONOMY OF NATURAL LAW. 

and is not found to any extent elsewhere. Natural Law, 
as embodied in organization, is responsible for its existence 
and importance. It takes small units, and builds them up 
into those which are much greater. 

Organization, as manifested on every plane, is charac- 
terized by force and utility. It is omnipresent in the 
physical world, erecting and cementing unities out of the 
most diverse materials. 

Those nations and peoples who possess the genius for 
organization, and understand its power, are distinguished 
for the number and variety of their corporations. Such 
were the ancient Eomans, and in Rome corporate organiza- 
tions had their early development. The corporation of 
to-day, in Europe and America, is a later and broader utili- 
zation of the principle that was found useful by Rome 
when she was mistress of the world. 

In general, corporations are divided into several classes, 
embracing the municipal, religious, educational, eleemosy- 
nary, and those of a commercial or business nature. As 
the latter compose the department under consideration, we 
shall confine our attention to them. 

Business corporations are creations of the State, formed 
for the prosecution of enterprises which cannot be carried 
on so efficiently by individuals. Theit object is the en- 
hancement of the comfort and welfare of the whole people ; 
but there was a time, in England, when royal charters con- 
ferred special and exclusive privileges. They are creations 
that have rights and obligations of their own, which are 
unlike those of their individual corporators. 

A corporation is not like a single great capitalist. Its 
shareholders are usually people of moderate means, and the 
organization becomes powerful only through the aggrega- 
tion of small sums representing shares. The office of this 
institution is to take this capital and wield it through 
chosen executive agents of unusual qualification, and thus 



THE MODERN COEPORATION. 241 

increase its power and utility. If rightly handled, it is 
like a labor-saving machine to the shareholder. It is not 
merely a concentrated agency, to hire labor and sell pro- 
duct, but its office is to take crude and inexpert labor and 
capital, unitize them, and through skilful processes trans- 
mute them into new forms Avhich, because more useful to 
society, will bring pecuniary reward. The corporation is 
not merely a great machine to be operated, but an economic, 
social, and moral force, so virile that it may advance as a 
pioneer far beyond the confines attainable to individual 
prospectors. 

An English lawyer logically demonstrated that corpo- 
rations "have no soul." He affirmed that none but God 
could create souls, and that corporations were creations 
of the king. This is often quoted as an inference that 
they are naturally hard and selfish. But the fact that 
they are soiilless, in some ways gives them peculiar power 
and efficiency. Their impersonal quality frees them from 
individual weakness and idiosyncrasy. They are giants, 
reduced to order and put within boundaries through the 
sovereign power of the State. 

The distinguishing corporate characteristic is perpe- 
tuity. The right of succession conferred by the State 
gives it great advantages over the individual. His opera- 
tions close with his life, but this complex theoretical per- 
sonage lives on. Officers and stockholders may die, or go 
into bankruptcy, but its activities are unceasing. How- 
ever, there are three possible ways in which it may come 
to an end ; viz., by the death of all its members without 
successors, which is extremely improbable ; by a voluntary 
surrender of its charter ; or by the repeal of its charter by 
the State. The latter, however, never takes place, except 
it be so provided in the charter, or in consequence of its 
violation, that being regarded as a contract between the 
State and the corporators. The corporation may make 



242 THE POLITICAL ECONOMY OF NATURAL LAW. 

its own laws, provided they do not conflict with the gen- 
eral laws of the State. Except in the line of its own 
specific purpose, it is not as free as the individual. It 
must follow the prescribed path, while he may make any 
contract which is not actually unlawful in its nature. Its 
creator marks out its limits, and gives it a name under 
which persons act in specified ways for definite purposes. 

It would be impossible for individuals to carry on great 
modern enterprises ; but even if they had the ability, every 
thing would have to be closed up, or disposed of, with the 
settlement of their estates. The super-personal power of 
corporate enterprise alone renders higher social evolution 
possible. 

Under our system of government, each State constitutes 
the sovereign power which creates and regulates the cor- 
porations which are located within its limits. There is, 
therefore, no uniformity in the powers, jjrivileges, and 
limitations contained in the charters of American corpora- 
tions. In some States the provisions for corporate estab- 
lishment are general and simple, so that with little 
formality the necessary papers can be placed on file with 
the proper authorities and a new corporation brought into 
existence. The provisions bearing upon the relations of 
the corporation with its shareholders are also very unlike. 
Some require a full contribution of the par value of the 
shares, while others leave all such details without restric- 
tion. On account of these differences, corporations are 
often formed and chartered in States other than those* 
where their business operations are mainly located. For 
railroads and other quasi public corj^orations, special legis- 
lative acts are required. The general tendency, however, 
is to substitute general laws and regulations for special 
acts, in the creation of corporations. Any peculiar or 
unusual chartered privileges have an exclusive and monop- 
olistic aspect which is unpopular, and not in accord with 



THE MODERN CORPORATION, 243 

democratic principles. Special legislation is rapidly giving 
way to that which is general, thereby placing the whole 
communit}^ on an equal footing. 

The rapid increase in the nnmber and variety of corpo- 
rations, and their groAving power, are suspiciously regarded 
by public sentiment. Here as elsewhere, it is easy to con- 
found abuses with the system, and to overlook great use- 
fulness and adaptation. "We vastly overrate their power 
for harm, even if they have harmful motives. Their pros- 
perity, as well as that of their corporators, is bound up in 
that of the body politic. As producers they are entirely 
dependent on demand, and can oblige no one to purchase 
their products, unless he may think it for his interest. As 
purchasers of labor or material, no one is obliged to sell to 
them except of his own free will. Even if the managing 
power of a corporation had savage instincts, it is securely 
caged in its outside relations by the natural principles of 
supply, demand, and competition, which are stronger than 
iron bars. "While the public is therefore secure, stockhold- 
ers are not always so AveTl protected. They are behind the 
bars, and sometimes need to be saved from their " friends." 

The popular impression of a corporation is that it is 
almost necessarily rich and selfish. But its peculiar func- 
tion is not Avell understood. It is an economic industrial 
force, created for a specific purpose. Its executive man- 
agement is a moral trusteeship for the carrying out of 
particular enterprise. It is not at liberty to divert the 
property of the stockholder into any channel outside of 
the special objects of the organization. Individuals should 
be benevolent, but it is a delicate ethical question whether 
or not corporate managers should be liberal with money 
which is not their own. It is entrusted to them for a 
specific purpose only. Benevolence is a function belonging 
to individuals, but not to a corporation, unless such an ex- 
ercise is included in its charter. But every corporation 



244 THE POLITICAL ECONOMY OF NATURAL LAW. 

should be humane, liberal, and moral, within the province 
of its recognized business. Individuals who compose a 
corporation, in their private capacity, should be altruistic 
toward all humanity ; but the organization, as a unit, has 
had its limited scope definitely marked out at the time of 
its creation. 

As a rule, the richest and most extensive corporations 
are composed of a large number of small stockholders. 
This is the case to an unappreciated extent with railroads, 
savings banks, and loan associations. Even the national 
banks, which in the eyes of many represent a small co- 
terie of the rich, are found upon examination to be ag- 
gregations of capital generally owned in small amounts 
and widely scattered. Unfounded prejudice against legiti- 
mate wealth is often carried so far that it almost seems as 
though honest thrift and industry were something not very 
creditable. But the savings bank is an index, not only 
of thrift, but of education, refinement, and philanthropy. 

The existing prejudice against corporations is not due 
to any inherent fault or lack of usefulness in the principle, 
but to the prevailing unfaithfulness among corporate man- 
agers. It lies in personal character — or rather the lack 
of it — and not in the system. 

The primary movement in the establishment of new 
forces in material civilization is in the direction of tempo- 
rary monopoly. But this is only a process. Its working 
is seen in the patent laws of all civilized nations. The 
secondary and permanent tendency is diffusive. There 
must be a gathered energy in the beginning to project 
new agencies into wide distribution. Meritorious inven- 
tions often fail to come into broad application because of 
the weakness of the centralized agency at their fountain 
head. 



THE ABUSES OF CORPORATE 
MANAGEMENT. 



" Justice, sir, is the great interest of men on earth.'''' 

Webster. 

" All jJoioer is a trust, and we are accountable for its exercise.'''' 

Disraeli. 

" Private credit is wealth ; j^ublic honor is security.^'' 

Letters of Junius. 

" No legacy is so rich as honesty.'''' 

All's Well that ends Well. 

" An honest man''s the noblest work of God.'''' 

Pope. 

" Render therefore to all their dues.''"' 

Romans xiii. 7. 

" Confidence is a plant of slow groivth in an aged bosom.'''' 

Pitt. 

{The Stockholder^ s Soliloquy.) 
" Though this may be play to you, 
^Tis death to ms." 

Fable. 



XXI. 

THE ABUSES OF COKPOEATE MANAGEMENT. 

DiKECTORiAL unscrupulousiiess is a dark cloud in the 
social and moral horizon. It blunts public honesty, drags 
down pure ideals, chills wholesome enterprise, and fur- 
nishes a plausible excuse for socialistic and anarchic agita- 
tion. But it is no more a part of the normal corporation 
than are the barnacles a part of a graceful yacht. It is not 
an inherent part of the " social system," but a deadly upas, 
whose roots, trunk, and branches are all in blighted personal 
character. 

It is often asked : Why is business so dull, good stocks 
so low, and money piled up in banks, instead of filling the 
channels of business ? People scan the financial horizon, 
and assign almost every other reason for these conditions 
than the true one. Various theories place the fault in the 
tariff, the administration, too much silver, too little silver, 
surplus legislation, or needed legislation. But the true 
reason is too little honesty. General confidence in the integ- 
rity of the average manager and director has been badly 
shaken. The " lambs have been shorn," and " the goose 
killed that laid the golden e^g,'^ and others are not forth- 
coming. 

The directorial board of a corporation, who are theoreti- 
cally its servants and guardians, become its dictators and 
consumers. But the demoralization is general, rather than 
special ; and it is to be feared that many who are not now 
officials would, under similar circumstances, do much the 
same. The manager is only a sort of exponent of the 
prevailing ethical standard. 

247 



248 THE POLITICAL ECONOMY OF NATURAL LAW. 

Directorial abuses are not only common, but subtle, 
plausible, and insinuating, so as to obscure and almost 
eclipse axiomatic moral principles, which are older than 
the Decalogue. The public conscience is so accustomed to 
directorial manipulation, and skilful and prolific ingenuity 
on the part of oificials, more especially those of the average 
railroad, that as a matter of course they are almost ex- 
pected. To be on the " inside " is often as good as a fortune 
assured. Unscrupulous management is regarded only as 
" shrewd financiering," and even as " brilliant," so long 
as it escapes technical and legal cognizance and punishment. 
Instead of earnest condemnation from the public press, it 
often calls out criticism only of a flippant or facetious 
character. Its direct consequences may be seen in great 
congested, unearned fortunes, in a lax public conscience, in 
the universal distrust with which the world regards the 
average American railway management, and in the trans- 
formation of a legitimate stock-investment business into 
one of a gambling character. It furnishes the text and 
vantage-ground of every anarchist, socialist, and would-be 
destroyer of our present social order ; and so far as legiti- 
mate investment is concerned, it has put it in close limita- 
tions. It seems strange that both legislation and public 
opinion have so lightly regarded these great commercial 
evils, and, while perfectly aware of their magnitude, have 
taken no earnest measures for their abatement. The direct 
financial sufferers are the hundreds of thousands of share- 
holders ^ and owners of other securities, who have furnished 
the nine or ten billions of dollars which have created the 
great arteries of American commerce, and without which 
the material resources of the nation would be but infantile 
in comparison with the present reality. The great majoritj^ 
of shareholders have no practical way of making their 

1 Their numbers range from a few hundred in some lines up to fifteen 
or twenty thousand each in a few of the great Western systems. 



THE ABUSES OF CORPORATE MANAGEMENT. 249 

influence felt in the conduct of the business of their several 
corporations, and are largely the victims of a false system 
which is strongly intrenched and of rapid growth. 

With all due recognition of numerous and honorable ex- 
cejJtions in the application of these strictures, the fact 
remains that the average railway management is autocratic, 
irresponsible, and often definitely dishonest in its relations 
towards its shareholders. Investors are made to bleed at 
every pore, while their jjseudo trustees, by means of earlier 
and superior information, fatten equally well on corporate 
adversity or prosperity. Between the triple combination 
of official dishonesty, the shackles of the interstate com- 
merce law, and hostile State legislation, the interests of 
the shareholder are ground to powder. 

Let us definitely note some of the ways in which the 
investor suffers from directorial chicanery. 

First. By manipulation in the stock market, through 
combination or conspiracy among the managers, to the un- 
fair disadvantage of the other proprietors. 

Second. By withholding regular reports, statements, 
and information, for personal advantage, the injvistice of 
which the common law does not take cognizance of. 

Third. By complicated systems of book-keeping, which, 
though not technically fraudulent, are misleading and 
deceptive. 

Fourth. By personal interest in other railways or cor- 
porations, with which consolidations, the absorption of 
branch lines, leases, or special running arrangements, are 
made, to the detriment of common stockholders. 

Fifth. By official interest in railway " construction 
companies " and fast freight lines, for personal advantage, 
to the disadvantage of the corporation. 

Sixth. By commissions and profits on, or an interest 
in, purchases or sales of material for the company. 

If the early and peculiar knowledge incidental to the 



250 THE POLITICAL ECONOMY OF NATUKAL LAW. 

position of the management be used as a basis for manipula- 
tion, to the detriment of the stockholder, it is as truly steal- 
ing, from a moral point of view, as it would be in case a 
portion of the rolling stock or track were purloined. Im- 
material possessions are as intrinsic, and as truly property, 
as are those assets which can be seen and handled. The 
public conscience should be educated up to the point of 
calling these actions by their right names ; and the lack of 
such explicitness has prompted proceedings, many of which 
are criminal in character, and which should be so classed 
in law and fact. 

After this catalogue of managerial short-comings, some 
of our well-meaning nationalistic enthusiasts will doubtless 
respond : " Yes, the abuses are heinous and therefore the 
Government shoiild acquire and operate these corporate 
properties — especially the railroads." Who is " the Gov- 
ernment " practically ? The politicians of the dominant 
party. Nationalization would add to the present array of 
evils the still more formidable corruption which inheres in 
political partisanship and " bossism." It might result in 
fastening on to the great arteries of commerce an enlarged 
national Tammany, the probable results of which may be 
faintly imagined. 

But though a great and general reform in the public 
morale is the important thing needed, it may be possible for 
legislation, applied from without, to administer certain anti- 
dotes that are well worth a trial. Some of them may be 
outlined as follows : — 

First. The compulsory issuing of monthly reports in a 
uniform manner, and after a prescribed formula, the cor- 
rectness of which should be affirmed by the oath of one or 
more directors, adding thereto such explanatory matter as 
the management might deem necessary. 

Second. A periodical audit by outside governmental 
examiners or professional accountants, duly qualified and 



THE ABUSES OF CORPORATE MANAGEMENT. 251 

sworn for this special service, on some plan similar to that 
used in the case of the national banks. 

Third. Construe as bribery the receiving of any com- 
missions or presents by any auditor, purchasing agent, or 
official, which are given because of his official position. 

Fourth. That it shall be illegal, with heavy penalties, 
for any corporate official or manager to buy the stock of his 
company, except for actual investment ; nor shall he sell 
the same unless he be the actual owner of the amount sold, 
and make a delivery of it ; and he shall neither buy nor 
sell except after prescribed public notice. 

Fifth. Require affidavits at stated intervals from each 
official that he has made no speculative sales or purchases, 
indirectlij, of the stock of his corporation, and that he has 
no interest in any such transactions made by or through 
any other persons. 

It may be objected that the last two proposed measures 
do not harmonize with the principles of laissez faire; but a 
sound political economy teaches that individual freedom 
must give way to collective freedom, and that the will of 
society is paramount to personal will. Managers would be 
restricted by such a plan only in a single direction, which 
is the vital point to be guarded, but elsewhere they would 
have perfect liberty. If the adoption of the last two meas- 
ures were found impracticable, the single requirement of 
monthly sworn statements would strike a telling blow at 
the abuses of official control. Adequate salaries should be 
paid for all official services actually rendered, which would 
remove every plausible excuse on the part of the manage- 
ment for any predatory invasion of the shareholders' inter- 
ests. It is time that the most necessary and honorable 
business of building and operating a railroad should be 
otherwise looked upon than as a " scheme," or even a game 
in which the management play with loaded dice. 

The systematic wrecking and reorganizing of railways. 



252 THE POLITICAL ECONOMY OF NATURAL LAW. 

in which the interests of the shareholder are uniformly 
sacrificed, forms, perhaps, the darkest stain upon American 
commercial honor. 

Practically, the average shareholder in a great railway 
corporation has no influence whatever in shaping its polic}^, 
even if he enact the farce of voting by self or proxy at its 
annual election. Is there, then, any remedy for the abuses 
which have been so harmful to the interests of investors, 
and which so seriously menace their future ? It seeme 
probable that a thoroughly organized working association 
of investors and stockholders in each important city might 
prove to be an exceedingly useful institution. Such organi- 
zations, by the employment of able committees on legal 
prosecution, legislation, economic literature, and in any 
other needed departments, might successfully grapple with 
abuses against which the individual is powerless. While 
advancing the interest of its own members, it also could 
greatly aid the general public in rooting out directorial 
manipulation and mismanagement, and in an important 
degree promote needed economic legislation, and also lend 
its aid in securing the repeal of that already in force which 
is harmful and superfluous. The moral as well as the 
legal power which such organizations might wield is very 
important. 

Looked at from the outside, every railway or other busi- 
ness corporation is a unit. This fact is realized in all its 
external relations, whether with the general public, with 
legislation, or in its commercial transactions. Like the 
human body, though it has many members, it has but one 
will, one head, one voice. But though a unit as viewed 
from without, its internal relations are many and complex. 
The usurpations of the management, who entirely control 
and regulate its outside relations, often entirely defeat the 
course intended from within. Stockholders should there- 
fore be more vigilant in o'uarding their own interests. 



THE ABUSES OF CORPORATE MANAGEMENT. 253 

Through combined effort they can make their influence 
felt, instead of passively perpetuating mismanagement, 
through the use of the conventional corporate machinery. 
Any well ordered efforts in this direction would not only 
conserve interests that were directly represented, but also 
have a wholesome moral influence in a broader scope. 



THE EVOLUTION OF THE RAILROAD. 



• No XJent-up Utica contracts your powers. 

But the whole boundless continent is yours,^^ 

Sewall. 



" Facility of communicatioyi in social, commercial, and political 
intercourse is a distinguishing index of civilization.'''' 

" Let observation, with extensive view, 
Survey mankind from China to Peru.'''' 

Samuel Johnson. 



XXII. 
THE EVOLUTION OF THE RAILEOAD. 

Progress toward higher civilization and social develop- 
]nent is hastened by the growing perfection of the means 
of communication and transportation. The body politic, 
like the human organism, mu.st have its vital currents ; and 
their circulatory processes are carried forward by means of 
arteries and veins. The roads of a country provide for its 
pulsations of living activity, and their superiority is an 
index of its progress, not only in commerce, but in art, 
science, and literature. Barbarism is universally charac- 
terized by the lack of any adequate facilities for travel and 
commercial intercourse. 

It is therefore in accord with Natural Law that the 
presence or absence of adequate roads indicates a dividing 
line between two diverse conditions of society. When the 
Roman Empire was at the height of its power and gran- 
deur, it Avas distinguished for its roads, and all led to 
Rome. Portions of the famous Appian Wa}^, built three 
hundred years before the Christian era, still remain. It was 
over three hundred miles in length, spacious, and smoothly 
paved with hewn stone blocks, laid in cement. Numerous 
other roads, equal in character to our best city streets, 
diverged from Rome for thousands of miles, to the most 
distant parts of the empire. Mountains of rock were tun- 
nelled, and rivers and ravines were spanned by massive 
stone bridges, over wddch her invincible legions could march 
without interruption, while" she was mistress of the world. 
These great works were so substantial that fragments of 

2.57 



258 THE POLITICAL ECONOMY OF NATURAL LAW. 

them still remain, notwitlistancling the disintegrating influ- 
ences of the frosts and floods of twenty centuries. In 
contrast, the feudal age of comparative barbarism was 
destitute of highways, and had no facilities for communica- 
tion. The baron of old England, or on the Rhine, who 
ruled the adjacent region, perched his castle on inaccessible 
heights. He built no roads or bridges, for communication 
was not desired. Wheeled veliicles, except a few of the 
rudest sort, were unknown, and all travelling was done on 
foot or on horseback, through fields, forests, and streams. 
Then there could be no social or mental progress, no com- 
merce, and no reciprocal activity. Industrial development 
was impossible for lack of channels. By Natural Law, fric- 
tion produces heat ; so inter-communication excites mental 
activity, and stimulates art, science, and invention. Nothing 
has so contributed to dispel the lethargy of ages, and to 
quicken the current of investigation, as the utilization of 
steam and electricity. 

Even turnpikes were not constructed in England until 
the early part of the last century, and the first English 
canal was dug as late as 1760. The yearly movement of 
merchandise on all the through land routes of the world a 
century ago, would not equal that of one of our great 
trunk lines of the present time. Long-distance transporta- 
tion by land, except for the most concentrated and valuable 
products, is entirely a thing of the present. We are more 
inclined to look at the present and the future, but a brief 
retrospect is often instructive. Not till 1833 was there a 
daily mail between London and Paris. The English postage 
on foreign letters was from twenty-eight to eighty-four 
cents, besides the foreign rates and ship charges to be paid 
by the receiver. On inland letters, at the same time, the 
postage was twenty cents per sheet. In our own country, 
u|) to 1845, inland rates were from six to twenty-five cents, 
according to distance. In 1851, a reduction was made to 



THE EVOLUTION OF THE RAILROAD. 259 

a uniform rate of three cents per half ounce. Not only 
modern civilization depends upon easy and rapid communi- 
cation, but even free government, except on a small scale, 
could hardly exist without it. Union of sentiment is in- 
dispensable to its continuance, and modern facilities of 
intercourse alone can secure it. The people of a vast terri- 
tory, like our own, are more thoroughly assimilated and 
unified than was possible a century ago with those of a 
single State. The far away provincial towns feel the met- 
ropolitan heart-throbs. 

We soon become accustomed to modern facilities, accept 
them as a matter of course, and regard their usefulness with 
indifference. Not only so, but we become exacting and 
almost unreasonable in our demands upon them. The 
prairie farmer, who perhaps formerly used his corn as fuel 
for lack of transportation and a market, soon forgets his ex- 
perience, and is dissatisfied with his present advantages. 
The railroad, which has doubled the value of his farm and 
products, and for the completion of which he ardently 
longed, soon becomes to him an offensive monopoly. 

A hundred years ago it cost three dollars to transport a 
barrel of flour a hundred miles ; and salt which was a cent 
a pound at a seaport, often cost six cents at an inland 
market. 

A part of the price of all products is made up of their 
cost of carriage from the place where they were grown or 
manufactured. Often a slight decrease in transportation 
charges creates new business, and enlarges that before 
established a hundred-fold, rendering necessary a large in- 
crease in the labor required. 

"When railroads were in their infancy, it was assumed 
that they would be public highways, and that every shipper 
would use his own cars, or trains, paying the company a toll 
for the use of their track. As business increased, it was 
soon found that such a plan was utterly impracticable. 



260 THE POLITICAL ECONOMY OF NATURAL LAW. 

The present clamor for restrictive legislation is perhaps a 
remnant of this antiquated idea, and much of that proposed 
is no more practical. A railroad is not merely an improved 
public highway, but a great and complicated transporting 
machine, requiring the highest order of ability for its suc- 
cessful operation. We are mainly considering public in- 
terests as related to railroads, but will briefly look at those 
of investors. We have seen that it is natural that, as the 
interval between the investor and in.vestment increases, the 
dangers from waste and mismanagement increase in like 
proportion. On this point Mr. John B. Jervis, in his able 
work on railway property, says : '' This kind of investment 
is not well suited in general to small proprietors so situated 
that they can exercise no control, and who are exposed to 
the danger of having their property managed by unfaithful 
men, who seek to make the institution subservient to their 
interest, rather than to that of the proprietors." 

The remarkable movement towards consolidation, which 
has taken place during the last thirty years, deserves brief 
attention. Popular sentiment is distrustful of growing ag- 
gregations of capital and power, and some look upon them 
as an evil, or even as a menace to our institutions. The 
fact that consolidation is not only caused by ISTatural Law, 
but is also ruled by it, is entirely overlooked. If the process 
went on, until there were only one gigantic system in the 
whole country, it would still be subservient to the imperial 
edicts of supply and demand. If it made an effort to im- 
pose artificial rates, or those that were even a little above 
the normal, then in a greater proportion demand would fall 
off and business and profits decrease. If a normal rate 
were restored, demand for service would be so much en- 
hanced that financial gain would result. Supply and de- 
mand perform their office as quickly and surely as does the 
" governor " of a steam engine. 

The earliest railroad charters were for short indej^endent 



THE EVOLUTION OF THE RAILTIOAD. 261 

lilies. In England the earlier railways averaged only fifteen 
miles in length. In 1847, five thousand miles were owned 
by several hundred different companies. In 1872, thirteen 
thousand miles Avere nearly all owned by twelve companies. 
This tendency has been nearh' as marked in this country. 
As a single instance, that part of the Xew York Central 
line between the Hudson River and Lake Erie, originally 
belonged to sixteen different companies. During the last 
few years the development has been, not merely into longer 
lines, but into great systems. Many of these now embrace 
from two thousand to six thousand miles of road, and form 
arteries through which commercial currents flow, giving life 
to great domains, each larger than some of the entire king- 
doms of the Old World. What is the cause of this general 
and rapid consolidation ? what are its tendencies ? and what 
will be the results ? It has taken place not by chance, nor 
because of any local or temporary reasons, but in obedience 
to the pressure and behests of unvarying Natural Law. 
The natural demand for decreasing rates of transportation, 
together with competition, have made it indispensable. It 
is a case of the '• survival of the fittest," and of a develop- 
ment of the lower into the higher. In no other way could 
such remarkable reductions in rates and vast increase of 
business have been realized. Under no other plan would 
such a degree of perfection in appliances and rapidity of 
service be possible. Modern convenience, comfort, and luxury 
are the results of the law of combination and consolidation. 
Contrast the present passenger service with that of thirty 
years ago. A passenger leaving New York for Chicago not 
only paid a much higher fare, but had to change at the end 
of each separate short line, and was as often compelled to 
stand in line to get baggage rechecked and reloaded, subject 
to frequent lack of connection, long hours of waiting, and 
other numerous discomforts. One consolidated system of a 
thousand miles in length can render to the public a service 



262 THE POLITICAL ECONOMY OF NATURAL LAW. 

which, is immeasurably superior in luxury, cheapness, speed, 
and safety, to that which would be possible with any half- 
dozen distinct corporations. 

The special and unprecedented national legislation known 
as the Interstate Commerce Law has now been in force for 
several years ; and, on the whole, its working seems to have 
been detrimental to the owners of railroad property with 
little compensating advantage to the general public. This 
law is based upon that clause in the Constitution which in- 
cludes, among the duties of Congress, the regulation of 
commerce between the States. The plain intention of the 
framers of the Constitution was to forever prevent, by any 
State, the erection of any customs tariffs, so that State lines 
should be no obstruction to the free currents of commerce. 
The idea of regulating the market price for carrying freight 
or passengers probably never entered their minds. Tlip 
basis for a national legislative interference \\'ith the legiti- 
mate, free, competitive business of common carriers, there- 
fore seems strained and unnatural. As the courts have 
sanctioned such regulation, however, their decision must be 
accepted. It is undoubted!}' true that the peculiar public 
sentiment which inspired this law was mainly prompted by 
directorial abuses ; but the aim was wide of the mark, for 
when the charge was fired, the game that came down was 
the shareholder. 

The object of government and legislation is not to de- 
stroy value, but to protect and conserve it. The Interstate 
law, through the long and short haul clause, and the pro- 
hibition of pooling, accomplishes the former. The right to 
arbitrarily regulate the rates for freight or passenger ser- 
vice, and thus place not only the earnings but the absolute 
capital — which derives its entire value from expected 
earnings — at the mercy of a possible unintelligent majority 
of Congress, even through a political commission, is the 
most radical and questionable legislative experiment of our 



THE EVOLUTION OF THE RAILROAD. 263 

national history. It is an assumption of legal authority 
which lacks a proper moral basis. The stiff unscientific 
hand of legislation undertakes to regulate prices which 
inherently have in them the elements of self-regulation. 
Objection to this will be made on the ground that railways 
are quasl-^nhViG institutions, and that by their charters 
they have been granted the right of eminent domain ; all of 
which is true, but the sole reason for granting that right 
was the public convenience, and the shareholder paid full 
value for every square foot of ground taken or damaged. 

Two ever-present natural principles regulate the price of 
railway service, as of every other salable commodity : (1) 
direct competition, and (2) the invariable fact that demand 
falls ofE the moment that prices are placed above the normal 
point. The latter principle, even in the entire absence of* 
the former, hedges in the strongest corporation. The 
greatest profit in the long rnn is always realized at fair 
rather than at exorbitant rates, popular opinion to the con- 
trary notwithstanding. 

As a proof, witness the steady decline in actual rates for 
railway service, as they kept pace with the normal — or 
those prices for which, owing to continually improving 
appliances, it could be rendered — before there was any 
legislation on the subject. A reduction of ten per cent in 
rates often brings an increase of twenty-five or even fifty 
per cent in business. 

Govermental regulation sounds well ; but the real, not 
the ideal government, may consist of a bare majority of 
unexpert and unconscientious politicians who happen to 
compose a given Congress. The material and financial con- 
ditions of no two of the hundreds of American railways are 
exactly alike ; and while the natural and elastic law of sup- 
ply and demand can adjust itself to them all, it is impossible 
for legislative law to accomplish this, as it has no flexibility. 

The Interstate long and short haul clause is economi- 



264 THE POLITICAL ECONOMY OF NATURAL LAW. 

cally irrational, and destructive of investors' interests, be- 
cause all price making, except in the case of natural 
monopolies which receive charters, is beyond the province 
of legislation. • 

Can any other law be named to which the enforcement, 
or permission to ignore, is left optional in each case with a 
board of extra-judicial commissioners? The law vests in 
a few men a power which is autocratic. The duty of the 
judiciary is to interpret and to enforce law; but this com- 
mission has the power to settle questions involving millions, 
as mere problems of expediency, in which no principle of 
right or wrong is involved. This Interstate law has already 
caused a shrinkage of hundreds of millions in the actual 
investments of American shareholders, and all without any 
corresponding advantage to shippers. The shipper, during 
a general business depression caused by the shrinkage in ' 
railway values, suffers in common with all other classes. 
If, however, shippers were benefited, it would be at the 
expense of justice. That section of the law which prohibits 
pooling naturally forces further and greater consolidation, 
as the only alternative to general bankruptcy. Business 
can only flourish under free conditions, and the true province 
of legislation is to enforce contracts which have been 
voluntarily entered into. 

But there is a section of evident utility in the Interstate 
law, and that is the one which prohibits discrimination 
under like circumstances and conditions. This section, un- 
like the two before examined, is founded on a moral prin- 
ciple. In the main, the Interstate law is the embodied 
expression of an unreasonable prejudice against vested 
interests as represented in the railway corporations of the 
nation. While directorial manipulation has greatly intensi- 
fied and made ostensibly reasonable this feeling, it is at the 
same time blind in its aim, and unjustifiable in its antago- 
nism to the rights and privileges of the shareholder. 



THE EVOLUTION OF THE llAILKOAD. 2G5 

Abnormally cheap long hauls, under free conditions, 
created a vast business, which is destroj^ed by the j^'^'o rata 
shackles of the " long and short haul clause," In many 
cases, if the roads are forbidden to do it at a somewhat less 
price, proportionately, than is charged for shorter hauls, 
the business is lost. A railway must maintain its facilities 
and fixed charges in either event, and therefore cheap long 
hauls are almost so much clear gain to the ordinary revenues 
of the road. With this source of income cut off, the de- 
ficiency in the long run must be made up by higher way 
rates than were necessary before the freedom of railway 
transportation was taken away. The Canadian Pacitic line, 
being free from the incubus of artificial restraint, is able to 
command an immense through business that would naturally 
be done by American lines, which fact in itself forms a 
striking commentary on the wisdom of " long and short 
haul " repression. 

Rates for railway service in the United States when 
compared with those demanded in Europe are found to be 
astonishingly low, notwithstanding the fact that employees' 
wages are more than double the European average. The 
rate charged per ton per mile by the great trunk lines run- 
ning from Chicago to the Atlantic seaboard, as shown by 
statistics, are a little less than one quarter of the average 
rates of the year 1865, On the great systems west, north- 
west, and southwest of Chicago the charges have been re- 
duced nearly in the same proportion. 

Restrictive railway legislation, as expressed in the re- 
cent enactments of several Western States, is unjust to the 
shareholder who has investments in the lines of those local- 
ities. iSI'ot content with the appointment of commissioners 
whose duties shall be to fairly and carefully conserve the 
interests of both the public and the roads, they construct 
ready-made tariffs, fix unreasonable maximum prices, and 
shackle what little commercial freedom has been spared by 
national enactments. 



266 THE POLITICAL ECONOMY OF NATURAL LAW. 

The result of the repressive policy, national and State, 
while disastrous to the dividend-earning capacity of the rail- 
ways, at the same time will prove morally and financially 
detrimental to the whole country. "When one member 
suffers all suffer." The track, road-bed, and rolling-stock 
of bankrupt, insolvent, and non-dividend earning lines 
necessarily deteriorate, and the public service becomes in- 
different. Railway enterprise, responsibility, and reliabil- 
ity will become impaired, unless the restrictive policy now 
so confidently pursued is relaxed in an important degree. 

The downward tendency in rates for the transportation 
of freight, before noted, which was steady and continuous 
prior to general legislative restriction, was in obedience to 
the principles of supply and demand. Greatly improved 
appliances, wielded by wider and more thoroughly organized 
control, cause the normal rates for service to decline, and 
natural principles are ceaselessly pressing actual rates into 
conformity. A normal rate is that point above which de- 
mand falls off so rapidly that profits diminish, and below 
which even a great increase of business would lessen them. 
The problem with railroad management is, therefore, to 
make the nearest possible approximation to it. It varies 
with every road, and with every different class of freight, 
and is a very complicated question, and one entirely beyond 
the province of legal enactment. How much each particu- 
lar variety of freight will bear, without in any way hinder- 
ing its greatest possible increase and development, is a very 
delicate problem, and must be solved with great care. 
Legislation is futile, not only because price-making is out- 
side of its province, but because no two roads are alike in 
business location, cost of maintenance, character of trafiic, 
and many other conditions. There is the same variety in 
these as in individual enterprises. To a great extent, rates 
fix themselves, arid the power of the management, in this 
respect, is greatly overrated. Suppose two or more compet- 



THE EVOLUTION OF THE KAILROAD. 267 

ing lines enter into a " cast-iron " agreement to fix rates 
that are somewhat above the normal. How soon shipments 
fall off, rival routes or water transportation compete, mar- 
kets are disturbed, and speedily the "cast-iron" crumbles. 
Take the extreme case of a road that has no possible com- 
petition. If even such a road attempts to impose artificial 
rates, business is hampered, settlement of tributary terri- 
tory discoiiraged, manufactures excluded, and profits actu- 
ally diminished. All railroad men have not jet become 
aware of these laws, but they are rapidly learning them, 
and also that a broad and liberal policy is the most profit- 
able. In no other kind of business is the old familiar 
principle of " large sales and small profits " so applicable 
and profitable as in railroad transportation. The reason 
for this is that st large part of the expenses consist of 
"fixed charges," which are unchanged, whether the traffic 
be large or small. Outside of these, expenses increase much 
more slowly than the amount of business. An increase of 
twenty-five per cent in general expenses might be sufficient 
for a business one hundred per cent greater. A system of 
five thousand miles probably would not cost half as much 
to operate as it did formerly when made up of a dozen 
distinct corporations. It has one board of management, 
instead of many ; unity of purpose in place of diversity ; 
single and thorough organization instead of inharmonious 
variety. The friction of one large wheel is much less than 
that of many small ones, and its power and momentum are 
vastly greater. Consolidation should be considered as the 
greatest labor and expense saving process of the age. Why 
should " reformers " make such efforts to excite popular 
prejudice- against consolidations ? Is it simply because 
they are great ? This is an sCge of grand things, and of 
wonderful privileges and benefits that are lightly appre- 
ciated. A sentimental cry of " monopoly " seems to be all 
that is necessary to arouse unthinking popular prejudice. 



268 THE POLITICAL ECONOMY OF NATURAL LAW. 

The greatest possible consolidation is hedged in on every 
side by the impregnable, though invisible, barriers of Nat- 
ural Law. With constantly diminishing rates for service, 
and increasing safety, luxury, and rapidity, it has not yet 
been explained how the modern railroad can be a "menace," 
either to the citizen or the government. Granted that 
sharp practice, stock watering, and many abuses exist, both 
in the construction and oj)eration of these great thorough- 
fares, the systems are here, and are to remain, and the 
public gets the advantage. Abuses are incidental to eveiy 
enterprise, no matter how meritorious ; and this will be the 
rule as long as the element of selfishness is dominant in 
human nature. Statistics show that in a majority of cases 
the original stockholders sunk the money invested, and that 
the lines were afterwards and are still being operated by 
other and different proprietors, who purchased the assets at 
a nominal price. In general, no other investments pay so 
small a rate of interest as those in railroad proj^erty. Stock 
watering is indefensible as a system ; but a candid view will 
show that, in some cases, it is only a " marking up " of 
nominal value to correspond with what has taken place in 
actual value. The enhancement of market and taxable 
values of terminal facilities and other kinds of proj)erty 
and improvements, is often considerable in a series of years. 
For instance : If the taxable and the salable value of a 
road have increased iifty per cent in ten years, is an in- 
crease of the stock by which it is represented in the same 
proportion in any way illegitimate ? While this is the 
popular impression, there seems to be no valid reason why 
railroad property should be exceptional in this respect. 

Another prevalent fallacy is that stock watering neces- 
sarily results in a higher tariff. We have already shown 
that rates are made by causes entirel}^ different. If the 
nominal amount of the stock of any road were quadrupled, 
or reduced in the same ratio, its material property still 



THE EV^OLUTION OF THE RAILIIUAD. 269 

remains unclianged. Its earning c-apacities, surroundings, 
facilities, and opportunities are neither increased nor di- 
minished. The normal rates at which business and profits 
are at the maximum continue as before. 

Wherever tliere is dishonest and extravagant manage- 
ment, the investor suffers ; but tlie public escapes, except 
indirectly. If unreasonable popular prejudice were grati- 
fied to the extent that, bv unfriendly legislation, these 
great corporations could be crushed, it would be found 
that scores of small owners would be ruined as often as 
one "millionaire." A large majority of the stock and 
bonds of these corporations is widely scattered among 
thousands of small holders, including even many widows 
and orphans. Hundreds of millions of dollars have been 
lost by investors, the benefit of which is noAv being realized 
by the public. The commercial importance of these far- 
reaching systems is even excelled by their moral and polit- 
ical value in unif\'ing all our diverse sections and interests. 

The highest order of executive talent is reqviired for 
their successful management. The chimerical plan that 
the control of these vast interests should be assumed by 
the general government, and so become the sport of poli- 
ticians, to be fought over every four years, is unworthy of 
serious consideration. 

Cheap and rapid transportation has created new com- 
mercial centres, and millions of worthless acres have not 
only been transformed into productive farms, but have 
practically been moved a thousand miles nearer to market. 
The "long-haul" business is entirely a thing of recent 
times. The food products of the great trans-Mississippi 
region are found in the European markets, through the 
practical annihilation of distance by the power of modern 
transportation. 

Art, science, and literature have all felt the quickening 
influence of this movement. Xothiug since the invention 



270 THE POLITICAL ECONOMY OF NATUEAL LAW. 

of the printing press lias so accelerated thought and inves- 
tigation. With the aid of steam and electricity a nation 
becomes a neighborhood, and the pulsations of news, poli- 
tics, morals, and religion are felt to the extremities. Mind 
attains increased preponderance over matter, the natural 
way of advancement is opened, and a new Renaissance is 
ushered in. By Natural Law, physical, mental, and moral 
attainment depend upon man's grasp and utilization of the 
forces with which nature's storehouse is overflowina:. 



INDUSTRIAL EDUCATION. 



" Let a man have accurate perceptions. Let Mm, if he have 
hands, handle ; if eyes, measure and discriminate ; let Mm accept 
and hive every fact of chemistry, natural history, and economics ; the 
more he has, the less is he willing to spare any one. Time is alioays 
bringing the occasions that disclose their value. Some wisdom comes 
out of every natural and innocent action. The application of means 
to ends insures victory and the songs of victory, not less in a farm or 
a shop than in the tactics of party or of war. One might find argu- 
ment for optimism in the abundant flow of this saccharine element of 
pleasure in every suburb and extremity of the good world. Let a 
man keep the law — any laiu — and his way will be strewn with satis- 
factions.'' Emekson. 

" Stretched on the rack of a too easy chair. 
And heard thy everlasting yawn confess 
The pains and penalties of idleness.''' 

PCFEo 



XXIII. 
INDUSTRIAL EDUCATIO:Nt. 

We are living in a })eculiar era. While Xatnral Law is 
unchangeable, its multiform applications are ever shifting. 
Old customs, conditions, and methods of thought are being 
superseded. The necessity for a readjustment is nowhere 
more marked than in the department of education. Former 
methods of training for active life require revision, almost 
revolution, in order that they may satisfy modern require- 
ments. Through changed conditions and the antagonism of 
trade unions, the apprentice system, once so universal, is 
almost utterly extinct, and the rising generation is brought 
face to face with serious problems. 

The conventional intellectual education of American 
youth is clearly inadequate to meet present social and eco- 
nomic demands. The regular professions, including the 
law, medicine, and theology — and even journalism and 
teaching — are already overcrowded and constantly becom- 
ing more so. American young men are too numerous to find 
occupation in the purely intellectual professions, and Avider 
opportunities must be afforded. The prevalent idea, espe- 
cially among the well-to-do classes, that their sons must em- 
ploy their talents within this select and limited range, must 
be modified, else overcrowding, inefficiency', and idleness 
will be prevalent and disastrous. 

Turning to other and more available pursuits, we find 
that their exercise and emoluments are rapidly slipping away 
from native-born youth and being grasped by those of for- 
eign birtli and training. A plain statement of the facts 

273 



274 THE POLITICAL ECONOMY OF NATURAL LAW. 

involyes no racial prejudice or exclusiveness, but only a rec- 
ognition of certain needed readjustments whicli are highly 
proper and equitable. 

Wliat shall the average American boy do ? In what 
channel can his faculties be trained so that he shall be a 
producer, or a useful member of society, and also by means 
of such economic activity be able to gain a livelihood. 
Through a virtual monopoly of all the principal industrial 
trades and handicrafts by the unions, which are controlled 
and almost entirely composed of the foreign born, the Amer- 
ican boy has come to be almost a superfluity. Opportuni- 
ties for thoroughly learning any industrial occupation are 
well nigh lost to him. To further aggravate the dilficulties 
of his position a prevailing false pride — shared not only 
by himself but often by his parents — ■ causes him to look 
askance at manual employment. 

While the American common school system, with its free 
and even compulsory intellectual training, has been a matter 
of just gratulation, and while it has filled an important 
place, it must still be admitted that its limitations are many 
and important. There has been some improvement in the 
general ideal of what true education — or educing — is ; but 
it still remains that the schools of all grades deal almost 
entirely with objective statements rather than subjective 
mental unfoldment. Their principal aim seems to be the 
acquirement of a great volume of unrelated facts of lim- 
ited practical significance, instead of a development of the 
latent capabilities. The popular idea of education is still, 
that it consists of knowing a great many things, whether 
or not these form any part of an all-around equipment for 
the duties of active life. 

Conventional education is also greatly destitute of the 
ethical element. It cannot be denied that each church and 
religious denomination has been indifferent, if not averse, 
to any moral system, lest some theological bias might creep 



INDUSTRIAL EDUCATION. 275 

in which wouhl be more favorable to the others than to 
itself. A regulation cin-rlriflum ethically colorless has been 
thought sufficient, the foundations for character and good 
citizenship being largely neglected. Laying aside all secta- 
rian suspicion, it would not seem difficult to agree upon a 
moral discipline to which not even the smallest minority of 
a civilized community would make objection. All will admit 
that animalism and selfishness, which are so obtrusive in 
energetic youthful character, need to be guided and moulded 
into higher activities. Without cant or affectation the 
teacher could inculcate the manly and womanly virtues of 
temperance, honesty, charity, chastity, truthfulness, justice, 
order, frugality, industry, honor, cleanliness of mind and 
body, generosity, gratitude, parental respect, heroism, patri- 
otism, reverence, self-respect, and manners, — all of which 
every citizen, be he Protestant, Catholic, Jew, or Agnostic, 
would heartily approve. Would not more of these abun- 
dantly compensate for a little less detail regarding the 
rivers of China, the mountains of Siberia, or the campaigns 
of Scipio ? Is this all relevant in political economy ? Vi- 
tally so, for State education has for its purpose the making 
of good citizens. General social and economic prosperity 
will depend upon the average youthful development of char- 
acter. 

Mere intellectual exercise only increases a force which 
Avithout ethical regulation is mischievous and hazardous. 
If "the worship of the almighty dollar," and the dominion 
of a sensuous materialism, are ever to be made secondary to 
higher aspiration, the germs of such a growth must be 
planted in the fertile soil of plastic mind. The ideal so- 
ciety can only be composed of ideal men. The youth who 
is ethically weak is but a bundle of disorderly and unbal- 
anced propensities, and mere intellectual equipment in- 
creases their energy. The great educational lack of the 
present time is in morality and industry. These must pre- 



276 THE POLITICAL ECONOMY OF NATUIiAL LAW. 

vail as tlie rule, else the condition of the State itself will 
become precarious. A stream can rise no higher than its 
source, and collective character will not excel that of the 
average individual. A verbose knowledge of objective 
facts will in no degree compensate for a lack of the founda- 
tions of good citizenship. 

When the average American boy '' completes his educa- 
tion " in high school, academy, or college, what can he do 
for the world, either mentally or physically, that will be of 
service, and at the same time give him economic support ? 
How can he stamp the regulation stock of learning which 
he has acquired into the coinage of society ? If he be un- 
able to do this it will soon decay from lack of exercise. As 
before noted, only a minority of college graduates can find 
places in the " professions," with journalism and teaching 
included. 

But what of the much larger number who conclude 
their course of study with the common or high school, and 
then wish to enter the active duties of life ? They find the 
available fields of activity all filled to repletion, and are 
unable to get a foot-hold. Pride and lack of opportunity 
then forbid them to begin to learn the rudiments of any 
industrial trade or handicraft. Their educational outfit has 
disqualified rather than fitted them to make any favorable 
start in a promising calling. 

The demand for sales-people, clerks, office-help, cashiers, 
and copyists, having been largely filled by girls, and the 
mdustrial trades by foreign unionists, the American boy 
after the completion of his school course finds himself 
stranded. He has reached high-water mark and deterio- 
ration begins. He cannot utilize the kind of education he 
has received ; and being unable to find occupation suited to 
his tastes and abilities, he soon drifts toward idleness and 
inefficiency. Even if of affluent family he is in reality 
much more helpless than his foreign-born associate who has 



INDUSTIIIAL EDUCATION. Zl I 

been bred to manual effort. In addition to a false pride 
and a spurious social standard, the American boy has to 
contend with lack of opportunity and an education which 
is a misfit. 

It is certain that manual training and trade schools, 
established and made efficient by the State, would greatly 
aid in the accom]:)lishment of two most desirable objects. 
It Avoidd, in a measure, supply the missing education tliat 
has been lost through modern conditions and the decay of 
apprenticeship, and also greatly ennoble and dignify manual 
employment. It would furnish a potent remedial agency 
for the idleness and degeneration which are becoming so 
serious and prevalent. 

Some degree of manual dexterity, and ability to use tools 
skilfully, is a valuable resource for every young man, even 
if he is to engage in a purely intellectual profession. 

It must be understood that there is a wide distinction 
between simple manual training and the full acquisition of 
special trades. A practical adjunct of the former could be 
made at small expense to almost every common school in 
the land, while the teaching of specific trades would only be 
possible where large institutional plants or shops could be 
centralized. Manual training, even Avith a few tools, so 
develops industry and precision, and educates the hands 
and e3'es, that it lays a general foundation for all trades, 
and there would be little difficulty in making it a factor in 
every common school course of instruction. Even brief 
manual cultivation would be of uniform profit, whatever 
might be the i)rospective avocation. It might be defined 
as athletics made useful, and at the same time reasonable 
in its intensity. Its reflex action upon the mind, Avhile 
lightly appreciated, is of high importance. It directly cul- 
tivates and stimulates care, exactitude, promptness, celerity, 
proportion, and even honesty. Every physical process pre- 
sumes a previous subjective plan and mental picture. A 



278 THE POLITICAL ECOXOMY OF NATURAL LAW. 

few years ago a gifted New York lawyer^ wrote a good- 
sized volume entitled '• Mechanics and Faith." In a most 
interesting and logical manner he traced out the corre- 
spondences and revelations, mental and spiritual, which a 
study of the principles of mechanics unfolds and indorses. 
Mechanical science, usually regarded as dry, is, in reality, 
rich in elements of beauty and even poetry. Applied me- 
chanical principles through systematic instruction would do 
much to idealize their exercise and lift them from the realm 
of drudgery. To make by hand even so simple a thing as 
a symmetrical box is not only a physical, but a mental and 
even artistic accomplishment. The most common works of 
life are capable of redemption from the prosy domain of 
duty and toil, and of investment with grace and dignity 
from a change of standpoint. Through a possible educa- 
tional treatment the plainest tasks can be idealized and 
made attractive. 

When one considers the immense amount of wealth 
that is poured into the endowment funds of conventional 
colleges where men are turned out all of a regulation pat- 
tern, whose education is largely unavailable and often 
utterly useless, it seems like a partial misdirection of a 
great possibility. The splendid example of Colonel Auch- 
muty of New York City, who founded the great industrial 
school which bears his name, is worthy of the imitation 
of other wealthy gentlemen who are bestowing their mil- 
lions in the endowment of the purely intellectual institu- 
tions, of which the country is already abundantly supplied. 
It is true that technical education is receiving more atten- 
tion than heretofore, and that a limited number are avail- 
ing themselves of its advantages ; but it should- become 
vastly more general, and instead of a very few institutions 
there should be scores. The methods and varieties of in- 
dustrial effort are so numerous that there is ample room 
1 Charles Talbot Porter. 



INDUSTRIAL EDUCATION. 279 

in this great field, both for the State and for many privately 
endowed institutions. Its principles are capable of indefi- 
nite application and expansion. It may extend from a 
simple annex to the common school house, where for an 
hour a day boys could learn the use of a few simple tools, 
up to the most elaborately equipped trade-shops and great 
technical institutions. 

The average boy needs some useful outlet for his 
abounding physical activity. Often he has no taste for 
books, and study to him is perfunctory and mechanical. 
He is an untrained and ungoverned force, liable not only 
to useless but to harmful activities. He needs something 
to arouse his interest, develop his latent faculties, and to 
turn his overflowing energy into some useful and practical 
channel. An hour a day of manual training with its i)re- 
cision and calculation will do much to evolve true manli- 
ness and self-reliance. To create or construct something 
tangible tends to inspire character. The development of 
one set of human faculties, through related and reflex in- 
fluences, invigorates all the others, therefore exercises 
should l)e frequently changed or alternated. 

Statistics show that a large proportion of the criminal 
class begin in their downward career between the ages of 
fifteen and twenty -one. They start out to be honest ; but 
idleness, which is the parent of all mischief, causes them 
gradually to drift into crime. They find no vacancies, 
either in business or the professions, and with expanding 
wants have no honorable means to supply them. Had 
they been educated to industrial dexterity they could be 
of use to themselves and to society. 

Hon. Samuel B. Capen, for many years President of 
the Boston School Board, and an active philanthropist, 
who is much interested in the subject of industrial edu- 
cation, says : — 



280 THE POLITICAL ECONOMY OP NATURAL LAW. 

" That there is a special reason for trade-schools is made more 
apparent when we remember that, out of every one hundred boys 
that graduate from our grammar schools, only one per cent enter 
the ministry, one per cent become lawyers, one per cent physicians, 
five per cent business men, and ninety-two per cent get a livelihood 
by their hands. Are we doing all we ought for the ninety-two per 
cent ? " 

Another able writer and expert, in speaking of trade- 
schools, says : — 

" The trad€-unions in these cities are controlled by foreigners, 
who seek to confine their industries to men of their own nationali- 
ties. They not only refuse to teach an American boy a trade, but 
they combine to prevent him from getting employment after he has 
succeeded in learning it in a trade-school. This is a situation of 
affairs without parallel in any country in the world, and one which 
will not be tolerated in this country when once public opinion has 
been aroused to a full comprehension of it. It is surely not too 
much for the American people to say that their own sons shall not 
only be permitted to learn trades, but shall be permitted also to 
work at them after they have learned tliem. We advise any one 
who is desirous of seeing the kind of skilled workingmen that the 
American boy makes to visit Colonel Auchmuty's schools and look 
over a set of photographs of his graduates. He will find there a 
body of clear-browed, straight-eyed young fellows who will compare 
well with the graduates of our colleges. This is the stuff from 
which laborers are made who honor and dignify and elevate labor, 
not by agitating, but by being masters of their craft, faithful in per- 
formance, and willing to share its toil with all comers, fearing 
honest competition from no quarter. Such men are at once true 
American laborers and true American citizens of the highest type, 
and the educational system which evolves them is a national bene- 
faction of incalculable value." 

In seeking for remedial agencies for the vast amount of 
social and economic infelicity of the present time, there is 
nothing so promising, and -which contains such grand possi- 
bilities, as industrial training. It should become as univer- 
sal as the present intellectual courses of instruction. To 



INDUSTRIAL EDUCATION. 281 

co-educate the head and hands is advantageous for both. 
If every common school in the land could have an annex, 
used for the cultivation of manual dexterity-, it would be a 
long step toward the elimination of prevailing sociological 
ills. Manual labor must be lifted and dignified by an ad- 
mixture of the intellectual element. It can be rendered 
positively attractive by judicious idealization. 



NATURAL LAW AND IDEALISM. 



"Because the soul is progressive, it never quite repeats itself, 
hut in every act attempts the production of a new and fairer whole.'''' 

Emerson. 



'■'■All nature is hut art unknown to thee ; 
All chance, direction which thou canst not see. 



Pope. 



" Up, my comrades ! up and doing ! 

Manhood'' s rugged play 

Still reneioing, hravely hewing 

Through the world our luay.''^ 

Whittiek. 

" That very laio which moulds a tear. 
And bids it triclcle from its source. 
That law preserves the earth a sphere, 
And guides the planets in their course.'''' 

Samuel Rogers. 



" Facts are stubhorn things.'''' 

Smollett. 



XXIV. 

NATURAL LAW AXD IDEALISM. 

The universal reign of law is the grand truth, which, if 
everywhere recognized, would transform the world. All 
human infelicity, Avhether physical, social, economic, moral, 
or spiritual, comes from a disregard or violation of the Es- 
tablished Order. Law will not and cannot bend to human 
caprice, for its lines are immutable. It is the final and 
infallible touch-stone which tests every opinion, institution, 
and system, and from its verdict there is no appeal. Its 
exact trial-balances and compensations put out of the ques- 
tion all cheats and short-cuts, while chance and even injus- 
tice are neutralized in the last analysis. It is a ubiquitous 
and righteous Judge, whose mandates can neither be dodged 
nor compromised Avith. The harvest will bear the likeness 
of the seed that was sown, whether in economics, morals, or 
any other realm of the mental economy. 

We are largely blind to the universal supremacy of Law 
because we fail to recognize the positive relationship and 
interdependence of all things. Every event and principle is 
related to and modified by everything else. Each one of 
these invisible but unbreakable ties possesses a significance 
and conveys an influence. As no boundary is possible, ex- 
cept in the human consciousness, there can be no obstruction 
to their orderly vibrations. 

The acceptance of this fundamental establishment nat- 
urally leads to the consideration of two sequential problems, 
which may be stated as follows : What is the nature of 
Law ? and, How may we become intelligently certain of the 

285 



286 THE POLITICAL ECONOMY OF jS^ATURAL LAW. 

direction of its leadings ? If it be uurepealable, it is liighly 
important to find whether or not it is nniformly good. A 
superficial glance at this vital question may make its answer 
appear doubtful. Take the supj)osed law of '"'the survival 
of the fittest," which seems to have a wide application, not 
only in the physical but in the social and economic realm. 
How can it be beneficent ? It may at once be admitted 
that from a material point of view alone, this and other 
inherent tendencies appear adverse. Is that the correct 
standpoint ? This directly suggests another question : . Is 
man body or mind ? If any one objects that such a query 
belongs to metaphysics, rather than to political economy, 
we reply that the science of economics is in the mind of 
man. Labor, capital, money, coinage, and tariffs are only 
external and resultant phenomena. Disconnected from 
their subjective relations they have no significance. In- 
trinsic political economy is written within man's constitu- 
tion, while the things so designated are only their visible 
articulation. The outward manifestation is only the shadow 
of the internal substance. All veritable social science is 
therefore subjective, or in other words, metaphysical. For 
this reason its conventional treatment is like the play of 
Hamlet with the principal character missing. 

But recurring to the nature of Law, we take the positive 
ground that it is as beneficent as it is universal. Only the 
standpoint which takes account of an all-comprehensive evo- 
lutionary trend will reveal this significant fact. Turning 
to first principles : If the grand purpose of creation be good, 
all its minor processes must be tending, even though indi- 
rectly, in the same direction. Law is only a comprehensive 
name for the orderly methods of the Creator. The supreme 
uniformity and reliability of phenomena prove that they 
are divine manifestations, and that only. An approximate 
human conformity to our highest interpretation of Law we 
call good ; and such a lack of, or non-conformity as is below 



NATURAL LAW AND IDEALISM. 287 

this standard we designate as evil. Only a higher and truer 
standpoint than the external and material will enable us 
wisely to interpret many forces of the physical and economic 
domain which seem destructive. 

The so-called law of selfishness when viewed from its 
own plane seems to be Law, but from the altitude of un- 
selfishness it is only relative immaturity. It appears to be 
Law from its being so general. The true beneficence of 
Law is found only in the breadth of its application ; as, for 
instance, the seeming good of the individual lies in his own 
sole advantage, but a deeper view shows that his truer 
benefit is only contained in wider relationship. The indi- 
vidual good can only find its highest realization withhi the 
general good. His supremest development cannot take 
place by itself. The " fittest " gain that position only by 
being channels for the less fit, and the latter need the 
former for inspiration and example. The selfish rich man 
is not only socially, but individually unfit, for his apparent 
completeness is only superficial. Selfishness, faction, an- 
tagonism, envy, and avarice, though having a kind of regu- 
larity Avhich makes them seem like laws, form no part of 
Law. The latter being uniformly beneficent lends its bene- 
diction just in the proportion that its methods are complied 
with. 

Law is not a great, blind, mechanical force, crushing its 
violators and opponents, but an infinitely potent agency to 
be intelligently Avielded and utilized. Its wonderful pos- 
sibilities are placed at our service. They are like the 
mechanical forces of the screAv or lever to the artisan, but 
extend in all directions and through all relations. 

Let us advance a step and note the paradoxical truth 
of the principle that all penalty for the violation of Law 
is not only inherent and corrective, but actually kindly. 
Were we able to sever cause and effect, and abolish all 
punishment that is seemingly severe, violation would con- 



288 THE POLITICAL ECOXOMY OF NATURAL LAW. 

tinue until logically followed by destruction. If one be 
idle, and poverty be the natural penalty, the latter is not 
an " evil," but a corrective monitor. Were it possible to 
entirely " abolish " it. idleness would continue indefinitely 
and find its end in decay. All so-called economic ills have 
bound up with them the rectifying forces of self-correction. 
The slower we are to learn their lessons, and the more we 
count them as " evils," the more severe the discipline that 
will be self-enforced. Antagonism is the most negative of 
all the negations of the universal Law of Attraction, and 
it therefore brings a bitter j^et still remedial penalty. 
Whether in individual or combination, capital or labor, 
rich or poor, high or low, it can only be transmuted into 
harmony and benefit through the purifying fires which 
make up inherent and severe retribution. 

In the great economy of Law, intelligent and truly altru- 
istic effort will not have for its object the abolishment of 
penalty, but of that which brings it. It is a legal part of 
Law that pain follows in the train of violation. Penalty is 
the shock we feel when we come in collision with Law. 
It kindly goads us until we come into conformity, but not 
by a hair's-breadth beyond that attainment. In economics, 
as elsewhere, it is not the punishment, but the sin which 
bears it as a fruitage, that needs to be eliminated. 

The fact that Law, in its immutable lines, can never be 
bent nor diverted in the least degree, is all that prevents the 
cosmos from becoming chaos. Retributory action in every 
department, physical, mental, or moral, is universally in- 
herent and corrective and never arbitrary or from the out- 
side. Our mistaken and antagonistic attitude toAvards it 
reflects our own hostility back. If we were to receive it as 
a necessary educator instead of an angry opponent, its face, 
to us, would be transformed so as to express its natural 
friendliness. 

Economic transgressions always bring their remedies with 



NATURAL LAW AND IDEALISM. 289 

them, and if the hitter were not bitter they wonki not cure. 
We often regard financial i)anics as unmitigated cahimities, 
bnt they really cleanse the system of the body-politic. 
They seem severe becanse they involve not only the econom- 
ically guilty, but also thousands of the innocent and of non- 
participants. Human relationship is so intimate and uni- 
tary that those who are lawful suffer with and for those who 
are lawless. The latter also find some degree of succor in 
the virtues of the former. Such a commingling — though 
having a superficial ai^pearance of injustice — breaks the 
boundary walls of the smaller or personal interest, and b}" 
its educational revelations brings to view the larger and 
truer Unit. It shows that there is no selfish element in 
Law, and that, paradoxical as it may at first appear, it is 
best that the innocent should divide the penalties of the 
guilty with them. Law has made no mistake, even though 
our selfish concern makes her seem unreasonable. If each 
suffered solely for his own economic transgressions, it might 
teach him prudence on his own account, bnt noAv he finds 
that his interest is woven into the ver}^ warp and woof of 
society. It is simply impossible for him to live unto him- 
self, even from the standpoint and purpose of self-interest. 
To help himself through the promotion of the general good, 
at length reveals the larger solidarity. The fact that trans- 
gressors and non-transgressors are inextricably commingled 
at first seems unfair, and even unjust ; but under the light of 
a truer interpretation it is found to be not only wise but 
positively beneficent. It is a standing object-lesson of racial 
unity. Law is incapable of true interpretation under any 
fragmentary restriction. One's superficial or apparent ad- 
vantage may suffer from things beyond his own control ; but 
Avhen the innumerable lines of relationship and compensa- 
tion are traced out, it is finally found that he receives his 
supremest good encompassed within that of his fellows. 
Sometimes at the close of a muggy summer's dav, when 



290 THE POLITICAX, ECONOMY OF NATURAL LAW. 

tlie atmosphere is heavy and murky, a thunder-storm, comes 
as a purifier, and the air is made balmy and the face 
of Nature becomes brigiit and beautifuL The process is 
severe, and occasionally involves local distress ; so all active 
advancement has some accompaniment of evolutionary grow- 
ing-pains. Expansion, extravagance, and specidation Trould 
go on until general financial inebriety ensued, were it not 
for occasional economic cyclones which tear aAvay the false 
masks that have been thrust upon natural and fundamental 
principles. When financial depression comes, there is a 
general readjustment of economic compasses, and the bear- 
ings are again correctly taken. The weak spots of a sophis- 
tical political economy are uncovered. It would be impos- 
sible for Law, as a schoolmaster, to educate men by the use 
of any milder means. 

Even the distress and poverty which everywhere follow 
in the wake of a monetary crisis have their compensations. 
They not only stimulate industry and production, but inspire 
a fraternal spirit and awaken a general altruism. Such a 
condition warms the chill atmosphere of selfishness, and 
brings into high relief the claims of man upon his brother 
man. The sweetness of charity is realized, and society is 
brought to see and feel that it is an Organism. Man discov- 
ers that he cannot live to himself alone, and that, in a vital 
sense, he is his "brother's keeper." ISTot only panics, but 
all economic ills, are monitors that rise up to teach us lessons 
that we refuse to learn in any easier way. 

Kich outward environment does not bring harmon}^ and 
contentment, even though the world believe the reverse, as 
indicated by the mad race for j)ower, wealth, and position. 
Material attainment, however wonderful, will never usher 
in the Golden Age. The wealth of invention, which has so 
greatly augmented man's physical accomplishment during 
the past fifty years, has conferred no additional happiness. 
Material progress will be utterly barren in the proportion 



NATURAL LAW AND IDEALISM. 291 

that it becomes an <'ml instead of an accessory. The greatly 
broadened scale of material comforts only increases man's 
sullen discontent with his lot. Humanitarians who confine 
their efforts to the amelioration of physical conditions alone 
only touch the surface of human misery. Without a higher 
evolution of character, if every one were housed in a palace, 
dissatisfaction, rivalry, and restlessness would still be the 
rule. 

Law seems stern and even baneful, when, through our 
ignorance, we foolishly antagonize it. But we may render 
it not only harmless, but transmute it into an infinitely 
powerful ally. He who utilizes steam or electricity in ac- 
cordance with their own laws, multiplies his physical accom- 
plishment a thousand-fold ; but if he disregard their orderly 
methods, and strive to impose his own notional theories upon 
them, he will receive the judgment of penalty. The thor- 
ough comprehension of Law is therefore the supreme human 
attainment. 

In the popular mind the idea of Law in political econ- 
omy is largely limited to the law of human legislation. 
The collective will of society, as expressed in statute books, 
is by no means identical in its mandates with Law, although 
government in modern times is increasingly seeking to 
mould its expressions after the natural order. Man was 
very slow in recognizing the dominance of Law in the phe- 
nomena of matter, and it will take him still longer to com- 
prehend that it is applicable to himself. In past ages, 
ethical and political economy aimed at social standards 
framed according to some notional abstract of what human 
nature ought to be, rather than basing it upon man's consti- 
tution as it is. This was owing to the entire lack of any 
comprehension of the great modern interpreter — Evolution. 
Ancient philosophers tried abstractly to build out of their 
own logic that knowledge which is only attainable by a care- 
ful observance of the working of laws through existing facts 



292 THE POLITICAL ECONOMY OF NATUEAL LAW. 

whicli express them. Plato's Eepublic, as an ideal State, 
was outlined from liis opinions of what society ought to be. 
Taking as his starting point the supreme importance of the 
State, other relations, like family life and affection, were 
obliterated or left out. Any processes of reasoning which 
leaTe Nature and her methods out of the account, or even 
make her secondary, are of no avail. 

The most important mistakes of the world have been its 
attempts — often well meant — to override or disregard the 
Established Order. Men think that they can formulate 
some plan superior and more expeditious than evolutionary 
processes. Instead of divining that the very lack of uni- 
formity among mankind is a natural and powerful force 
working toward universal progress, they make comprehen- 
sive plans for union through likeness. Law makes up unity 
of diversity. Organism of every grade is always a harmo- 
nious blending of unlike functions. 

Nature has no short-cuts, magic, or spontaneity. But her 
activities, though immutable, are always elastic and comprise 
the only perfect means to ends. Mind being as amenable to 
Law as matter, political economy is an exact science. But 
it becomes so to our consciousness only to the degree that 
we move parallel to its lines, and trace out the ties which 
bind events to their antecedent causation. Failing in this 
we realize discord and confusion. 

But Law, though unchangeable in itself, is, to us, pro- 
gressive as we make advances onto its higher planes. Our 
progression comes from the growing supremacy of the 
higher over the lower motives in the human mind, and the 
former are no less natural than the latter. The Ideal to- 
wards which our faces are turned is as positive as the Eeal 
which is at our side. The difference is only in evolutionary 
location, the former being farther along the great highway. 

Human legislation has largely been an effort to impose 
collective notional Will — at the time ruling — without 



NATURAL LAW AND IDEALISM. 293 

much search for the true Criterion. Just where it has 
deflected from this standard it has failed. 

But there is a notable dissimilarity between natural 
and legislative law which is signiticaut. Human enactment 
is almost entirely negative. It consists of a comprehensive 
and ever repeated, " thou shalt not.*' Xatural Law is posi- 
tive and, so far as it is observed, negations are left behind. 
Negation is the absence of any thing. Stealing, cheating, 
and all economic abuses, are lacks or non-recognitions of the 
normal social economy. They are spots where man fails to 
interpret the laws that are written within his own constitu- 
tion. Hence they introduce inharmou}^ and subjectively 
nullify the Established Order. Selfishness is not natural, 
in the high and normal sense of that term, but it has the 
appearance of a law because animality or human immaturity 
is common. 

That which men have in themselves they see everywhere 
objectively reflected. One who is disposed to cheat sees 
cheating in the atmosphere around him, until he mistakenly 
concludes that it is a part of the Established Order. But 
it is entirely in men, and Law knows it not. 

Ideal political economy is the pure natural system un- 
marred by the clouded consciousness of its daily multiform 
infractions. Idealism is as profitable in economics as in 
any other great subdivision of Truth. It consists of hold- 
ing up the true potentiality or fulness of what already 
is. It is not a vapory uncertainty of the future but the 
present perfect substance. If men everywhere held the 
Criterion before them instead of comparing themselves 
among themselves, general progress towards the normal 
would be rapid. Ideals are always striving to actualize 
themselves. 

The great desideratum of man is not an ever increasing 
aggregation of facts, but rather a clearer perception of the 
outlines of the Normal. We must also dismiss the idea 



294 THE POLITICAL ECONOMY OF NATURAL LAW. 

that because abnormity is common, it is Law. Adam Smith, 
made it plain that Nature in the human mental economy 
had made provisions for every man, so long as he observed 
the principles of justice, to use both his own industry and 
capital with the utmost freedom of competition. This har- 
mony with Nature he taught would result in the largest 
measure of individual and national wealth and prosperity. 
In proportion as human legislation is more restricted than 
Natural Law, men are deprived of the power to work out 
ideal results. Its bungling interference not only defeats 
the end sought, but deranges all the delicate and elastic 
forces which, if left to their higher working, would hasten 
normal development. If it deprives a laborer of a part of 
his hours, or if his union orders him out of a situation, in 
either case he loses something of his natural freedom. Un- 
restricted competition, both for labor and capital, is the 
only full measure of liberty for the individual and the 
nation. All artificial forces that seek to install themselves 
under the plea of special advantage to some class or faction, 
in their practical working are only new forms of tyranny 
which retard natural evolutionary advancement. Every 
fraction must find its good in that of the whole. The 
human phalanx cannot be turned aside into artificial by- 
X^aths, but its way is already smooth along its own natural 
highway. 

Political economy is the outward expression of the play 
of the forces of the mind. It is like a game of chess : the 
pieces being moved after the real move has been made in 
the mind of the player. As the powers that are within 
man are tamed, controlled, and brought into orderly har- 
mony, all external phenomena, whether of labor, capital, 
land, or money, will exactly correspond, for the reason that 
they are secondary and expressive. Mind is the worker, 
and these are its tools. 

The spirit of association must broaden its aims and in- 



NATURAL LAW AND IDKALISM. 295 

terests. It may be a i)Ositive institution, but if its purpose 
be unfriendly to the general and greater Unit, to that degree 
it is normally unlawful. 

Intellectual logic is inadequate to the delicate interpre- 
tation of Natural Law, and of its articulated adjustment to 
human affairs. The intuitive faculty being keener, and of 
liiglier grade, is however able to make its leadings so clear 
that they may be translated into outward harmonious ex- 
pression. Intuition alone is able to put its ear to the 
ground and distinguish between discordant, even though 
faint jars, and concordant vibrations. Onl}- that delicate 
insight which lies deeper than a mere intellectual account 
of phenomena, can cognize the lights and shades of those 
line but immutable golden threads which are shot through 
the entire social fabric. 

The supreme and ideal political economy can only be 
formulated from the standpoint of racial unity. Any study 
of combinations, competitions, and co-operation, cannot be 
exhaustive on the basis of a fragmentary society with 
divided interests. Only a synthetic interpretation is ade- 
quate, because analysis and separation invariably show dis- 
proportion. jNIan is One ; and just in the measure that that 
grand fact is installed in human consciousness, are all the 
natural principles found to be altruistic. Any pliilosophy 
of Humanity is incomplete which does not regard it as an 
Organism. Its members, though unlike, have one interest 
and one order. Any suffering or rejoicing cannot be local- 
ized, for its vibrations thrill to the utmost limits. 



INDEX. 



Abilities of men not equal, 102. 

Ability, executive, at a piemiuui, 
177. 

Abstinence necessary to the would- 
be capitalist, 5(5. 

Accumulation, passion of, a curse, 
183. 

Action and Reaction, 19G-207. 

Agitators, professional, 90. 

Alms-giving not the best help, 141. 

Altruism demands disciplinary pen- 
alties, 93. 

distress and poverty teach, 290. 

Antagonism and remedial penalty, 
288. 

between capital and labor, 99. 

in society assumed to be neces- 
sary, 47. 

Apprenticeship system, 273. 

Arbitration, governmental, 116-120. 

voluntary, 119. 

Association, principle of, misappli- 
cations of, 76. 

spirit of, must be broadened, 

294. 

Astor estate, 177. 

Banking system, evolution of the 

U. S., 215. 
system, national, an outgrowth 

of need of government, 202. 
Banks, national, as monoplies, 216. 
state, 215. 

Barbarism, insecurity of private 
property a cause of, 153. 

Barbarous tribes, currency used by, 
218. ^ ^ 

Baring Brothers, failure of, and 
p.anic of 1890, 204. 

Barter unsuited to civilized com- 
munities, 212. 

Beneficence must be voluntary, 172. 



Benevolence not a function of busi- 
ness corporations, 243. 
Bimetallism, 218. 

by natural law, 224. 

Black-listing, 106. 

" Booms " and panics, 196-207. 

Boycott an injury to society, 87. 

extreme application of, in 

Australia, 90. 

Brotherhood of locomotive engi- 
neers, 81. 

Business, dull, caused by dishon- 
esty, 247. 

methods vs. those of senti- 
mentalists, 78. 

Canal, the first English, 258. 

Capital and Labor; can they be 
harmonized? 158-168. 

benefits all classes, 164, 181. 

combinations of, 60-72. 

defined, 159. 

effect of annihilation of, 78. 

labor unions antagonistic to, 77. 

not limited in quantity, 159. 

short average life of, 180. 

Sep- Labor troubles. 

Capitalist, difference between cor- 
poration and, 240. 

would-be, must practise absti- 
nence, 56. 

Centralization a condition of wide 
distribution, 244. 

law of, 186-194. 

Character and competition, .35. 

and extinction of price, 32. 

audin dustrial education, 279. 

defective, of managers the 

bane of corporations. 247. 

defective, the cause of failure, 

43. 



297 



298 



INDEX. 



Character, defective, the cause of 
ills of society, 94. 

degraded by voluntary depen- 
dence, 139. 

inefficient service deteriorates, 

92. 

labor unions unfavorable to 

manly, 80. 

Charity, mistaken, 141. 

money given in, increasing, 

171. 

should be scientific, 138. 

See Beneficence and Philan- 
thropy. 

Cities, growth of, 189. 

Citizenship, good, and moral edu- 
cation, 275. 

Civilization and centralization, 188. 

depends upon property rights, 

153. 

Classes, interests of, mutual, 47. 

Clearing-house certificates, 207. 

Coinage, money and, 210-224. 

Colles;es, deficiencies of work of, 
278. 

Combinations amongst employers, 
106. 

and natural tendencies, 29. 

menace of, to government 

overrated, 193. 

of capital, 60-72. 

See Monopolies. 

Commerce and tlie American boy, 
276. 

evolution of the large retail 

establishment, 190. 

increased by credit, 214. 

Stewart estate, 178. 

Communism, voluntary local, 152. 

Competition and Co-operation sup- 
plementarj', 43. 

natural monopolies, 68. 

between parts havinglike func- 
tion, 101. 

blamed for evils, 93. 

has lowered rate of interest, 

179. 

law of, 17, 34-40. 



Competition must govern until an 
ideal millenium is realized, 
154. 

price and, 27. 

should be unrestricted, 131. 

unrestricted, and liberty, 294. 

Competitive system a scapegoat, 
151. 

beneficent, 43. 

Conciliation superior to arbitration, 
119. 

Confidence a subjective factor of 
money, 214. 

conditions for, 112. 

lack of, and panics, 203. 

the life-blood of prosperity, 92. 

want of, in railroad manage- 
ment, 248. 

Consolidation of railroads, 260. 

cheapens service, 267. 

Consumption lowered by high tar- 
iff, 229. 

Contract, freedom of, the corner- 
stone of true government, 117. 

shall freedom of, be destroyed? 

91. 

Co-operation an element in profit 
sharing, 104. 

a remedy for labor troubles, 165. 

— -competition an element in, 36. 

effect of, without competition, 

38. 

law of, 42-48. 

See Association and Profit-shar- 
ing. 

Corners, 61-72. 

"French Copper Syndicate," 

64. 

usually unsuccessful, 28. 

Corporate management, abuses of, 
246-253. 

Corporation, the modern, 238-244. 

Counterfeits under State banking 
system, 216. 

Credit, 214. 

high, valuable to States, 222. 

Crime and industrial education, 279. 

Currency, effect of war of 1861 on, 
201. ' 



INDEX. 



299 



CuiTency, relation of volume and 
puicliusiiig power, 202. 

the cause of panic of ISK.'i, 204. 

See money. 

Debt and panics, 198. 

Debtors injured in tlie end by 
cheapened currency, 222. 

Degradation caused by idleness, 53. 

Demand an element of value, 40. 

supply and, 2-l;-;)2. 

Democratic party, position of, upon 
the tariff, 229. 

Demon itization of silver, 220. 

Dependence aiul poverty, 134-141. 

Despotism in the guise of philan- 
thro[>y, 117. 

Discontent, cause of amongst man- 
ual laborers, 162. 

Discrimination in rates by rail- 
roads, 2(J4. 

Domestic service and competition, 
37. 

false pride about, 93. 

Drudgery eliminated by education, 
278. 

Duties, incidents of, 235. 

kinds of, 234. 

Economic evils, cause of, 15. 
See Ills of .society. 

Economy. See Social economy. 

Education, conventional, and ethi- 
cal training, 274. 

nuidequate, 273. 

of individual the basis of true 

co-operation, 46. 

the great need of the wage- 
worker, 110. 
See Industrial education. 

Eight-hour .system in Chicago, 83. 

Employees, advantages of having, 
sliareholders, 104. 

liow to secure allegiance of, 

102. 

not machines, 100. 

obligations and privileges of, 

108-113. 

Employer, aim of laborer to be- 
come an, 55. 



Employers and profit-sharing, 98- 

loo'. 

Emulation, influence of, 38. 

Enterprise the great stimulus to, 
154. 

Environment as a factor of happi- 
ness, 2'JO. 

effect of, upon American work- 
man, 231. 

good of individual as related 

to, 287. 

Ethical training necessary, 274. 

Evil defined, 286. 

Evils. See Economic evils. 

E volut ion , mind as a factor in social , 
57. 

of the Large retail establish- 
ment, 190. 

the great interpreter, 291. 

Excellence, influence of labor 
unions against, 79. 

Exchanges, intrinsic value of 
money alone considered in for- 
eign, 214. 

Factory legislation, 129. 

Failure due to defects in character, 
43. 

Faithfulness stimulated by profit- 
sharing, 102. 

Farmer and the tariff, 2.33. 

Fiat element in ideal currency, 212. 

Fortunes, can, be limited? 172. 

great, and development of rail- 
road system, 175. 

more difficult to acquire than 

formerly, 178. 

unearned, 248. 

Freedom of contract, shall, be de- 
stroyed? 91. 

subverted by labor uiuons, 81. 

Free list, 235. 

Freight rates, 203. 

a century ago, 259. 

decline in, since 1865, 265. 

effect of redixction in, 69. 

, normal, defined, 266. 

.S'ee Railroad tariffs. 

" French Copper Syndicate," 64. 

Futures, speculation in, 69. 



800 



ESTDEX. 



Good defined, 286. 

of individual as related to en- 
vironment, 287. 

Gold, qualities commending, for 
use in coins, 216. 

ratio of value of, to silver, 219. 

Government, menace of combina- 
tion to, overrated, 193. 

our free, favorable to produc- 
tion, 58. 

ownership of railroads, 250, 

269. 
" Granger laws," 126. 
Greeley, Horace, upon voluntary 

local communism, 152. 
Growth, law of, 14. 

Happiness, environment as a fac- 
tor of, 290. 

not a necessary effect of 

wealth, 161. 

proportioned to merit, 93. 

Harmony between capital and 
labor, can, be realized? 158-168. 

conditions of social, 46. 

how to secure, 100. 

intuition and social, 295. 

See Conciliation. 

Health and overwork, 52. 

Heredity, laws of, tend to disperse 

wealth, 180. 
Hours of labor, 92. 

in Chicago, 83. 

■ statutory regulation of, 128. 

Idealism, natural law and, 284- 

295. 
Ideals and progress, 293. 
Idleness a torture, 111. 

bad effects of, 53. 

Ignorance a cause of want, 94. 
Ills of society, legislation involved 

to cure, 147. 

no panacea for, 164. 

the outcome of defective char- 
acter, 94. 

^ee Economic evils. 
Improvidence caused by idleness, 
53. 



Independence defined, 54. 
Industrial education, 272-281. 
an agency for cure of social 

ills, 94. 
" Industrials," speculation in, and 

panics of '90 and '93, 204. 
Industry, influence of labor unions 

against, 79. 
purpose of legislation and 

political science to protect, 154. 
Inflation a calamity to labor, 174. 

effect of, on wages, 222. 

eras of, make accumulation of 

wealth easy, 173. 
Inheritance, laws of, tend to dis- 
perse wealth, 179. 
Intemperance caused by idleness, 

53. 

Interdependence of mankind, 289. 

Interest has declined with increase 
of wages, 161. 

declining, 179. 

■ effect of legislation upon, 27. 

rate of, paid by railroad invest- 
ments, 268. 

Interstate commerce law, 262, 265. 

Intuition and social harmony, 295. 

Investments, effect of unrest upon, 
91. 

made difficult by dishonest 

corporate management, 248. 
Investors and railroads, 260. 

Jervis, John B., upon railroad 
property, 260. 

Knowledge, useful, defined, 16. 

Labor, all kinds of, interdepen- 
dent, 111. 

and capital, can, be harmon- 
ized? 158-168. 

and production, 50-58. 

causes of over-supply of, 92. 

combinations of, 74-95. 

defined, 159. 

demand for. increases with ad- 
vance of civilization, 161. 

does, receive a fair share of the 

product? 162. 

indisiiensable to manhood, 93, 



INDEX. 



301 



Labor, inflation a calamity to, 174. 

manual, not degrading, 53. 

money stored up, 212. 

iSee Hours of labor. 
Laborers and their champions, 0. 

cause of discontent amongst 

manual, 162. 

labor unions tyrannize over 

unorganized, 87. 

^ndard of living of, in the 

T?:S.,231. 

unorganized, ignored, 88. 

See Employee. 
Laboring man, con^etition and, o9. 

meaning of term improperly 

restricted, 39. 
Labor troubles, profit-sharing the 
remedy for, 10-1, 166. 

the spirit that harmonizes, 101. 

See Harmony. 

union, the ideal, 9-1. 

unions and American youth, 

27i. 

bad effects of, upon laborers, 

55. 

effect of, upon wages, 30. 

light of, for exclusive recog- 
nition in Australia, 89. 
put a premium upon incompe- 
tency, 39. 
when, are mere animal co- 
operation, 45. 
Labor-value, how, is fixed, 160. 

the sole basis for protection, 

231. 
Land, effect of governmental own- 
ership of, 154. 

made valuable by railroads, 

176. 
Law defined, 286. 

foundation of human, 19. 

place of, in human life, 291. 

universality of 7,285. 

See Natural law. 
Laziness a cause of want, 94. 
Leclair's experience with profit- 
sharing, 102. 
Legal tender in colonial times, 212. 



Legislation and the panic of 1893, 
20(5. 

an element in ideal currency, 

212. 

economic, and its proper lim- 
its, 122-131. 

generally negative, 293. 

in favor of debtors harmful, 

222. 

invoked to cure social ills, 147. 

lax in dealing with abuses of 

corporate management, 248. 

limited power of, 14. 

not identical with natural law, 

291. 

purpose of, to protect industry, 

154. 

reform of abuses in railroad 

management by, 250. 

restrictive railroad, detrimen- 
tal, 265. 

special, dangerous, 117. 

tendency towards general, af- 
fecting corporations, 242. 

Liberty requires unrestricted com- 
petition, 294. 

Living, standard of, of laborers in 
tlie U. S., 231. 

Lock-outs, 106. 

" Long and short haul clause," 265. 

IMachtnery, effect of labor-sav- 
ing, 5(). 

on tariff, 231. 

Man, the ideal, 53. 

Management, abuses of corporate, 
246-253. 

disadvantages of governmen- 
tal, 124. 

Manual employment and false 
pride, 274. 

the American boy, 276. 

Training. See Industrial edu- 
cation. 

ISIargins, 70. 

Mental force exceeds manual force 
in its reward, 162. 

Mind an increasing factor in social 
evolution, 57. 

increases production, 183. 



302 



INDEX. 



INIisery, pictures of, do not arouse 
men to action, 136. 

Money and coinage, 210-224 

stored-up labor, 212. 

See Currency. 

Monometallism, silver, 221. 

Monopolies, causes and tendencies 
of, 188. 

national banks as, 216. 

natural, and competition, 68. 

rates of railroad, governed by 

natural law, 267. 
See Combinations, Trusts, Stan- 
dard Oil Co., and Western 
Union Telegrapli Co. 

Municipalism, limits of, 123. 

Nationalists, plan of the, 147. 
Nationalization of railroads, 250. 

chimerical, 269. 

Natural law and idealism, 281-295. 

characteristic of, 13. 

reliability of, 16, 20. 

scope of, 14. 

supremacy the result of knowl- 
edge of, 57. 

Organism: and unlike functions, 

292. 

society an, 295. 

Organization, more efficient, the 

basis of corporations, 240. 
Over-production, bow to abolish, 

112. 

influence of tariffs on, 233. 

Overtrading a cause of panics, 198. 
Overwork harmful, 52. 

Panaceas not a remedy for the ills 
of society, 15. 

Panic and distrust of fiat element 
in money, 214. 

"Booms " and, 196-207. 

■ caused by labor unions, 91. 

of 1893, 215. 

Paternal government cannot har- 
monize capital and labor, 165. 

— — fosters dependence, 140. 

Paternalism and competition, 39. 



Pauperism and poverty differ, 140. 
Penalties beneficent, 287. 

Philanthropy may make despo- 
tism, 117. 

on business principles; the 

Pullman Co,, 105. 

true, requires the study of 

causes, 94. 
See Charity. 

Political economy and exaat sci- 
ence, 292. 9 

and tlie place of mind, 294. 

conventional, 6. 

defined, 18* 

factors In, 204. 

relation of, to the mind, 286. 

standpoint of ideal, 295. 

study of, 16. 

Political science, purpose of, to pro- 
tect industry, 154. 

Population flows to cities, 187. 
Postage, effect of lower rates of, 192. 

rates of, 258. 

Poverty and competition, .37. 

are tlie poor growing poorer 

and the rich riclier ? 173. 

dependence and, 134-141. 

no panacea for, 164. 

not an evil, 288. 

Precious metals, parity of, 223. 
Price, competition and, 27. 

effect of trusts on, 40. 

equalizes supply and demand, 

26. 

extinction of, 32. 

fluctuations minimized by 

modern conditions, 179. 
imposition of artificial, im- 
moral, 62. 
of bread regulated by law, 

127. 

of railway service, 263. 

Prices, artificial, short-lived, 28. 

fall in, 203. 

Product, does labor receive a fair 

share of, 162. 
effect of prevailing fallacies 

on, 39. 



INDEX. 



303 



Product of manual labor, increase 
in, 151. 

Production a. miiiiniuni under so- 
cialism, list. 

distribution of instruments of, 

'2:M. 

increases with brain power, 

18.S. 

in England and the U. S. com- 
pared, 232. 

labor and, 50-58. 

natirral unit in, 99. 

not solely the result of physi- 
cal labor, 109. 

our free government favorable 

to, oS. 

the great stimulus to, 154. 

Professions overcrowded, 273. 

Profit-sharing, employers and, 98- 
lOG. 

the remedy for labor troubles, 

106. 

Progress accelerated by competi- 
tion, 38. 

and ideals, 293. 

conditions of, 52, 54. 

depends uiion diversity, 292. 

key to, 19. 

law of ecomonic, 58. 

socialism fatal to, 146. 

Progression, how, takes place, 292. 

Property rights the basis of civili- 
zation, 153. 

rises in value during periods 

of inflation, 174. 

Prosperity depends upon confi- 
dence, 92. 

jeopardized by strikes, 82. 

].ernianent, 223. 

precedes panics, 200. 

results from .bedience to law 

47. 

sacrificed by freqiient changes 

in tariff, 230. 

the great stimulus to, 154. 

Protection, tariffs and, 226-236. 

Public opinion lax in dealing with 
abuses of corporate manage- 
ment, 248. 



Pullman Car Co., successful ox- 
lieriment of, in benefiting 
workmen, 105. 

Purchasing power of money, in- 
creasing, 217. 

Quality an element of value, 40. 

Railroad building, abnormal, the 
cause of ijanic of 1873, 202. 

evolution of the, 256-270. 

management often dishonest, 

249. 

system, development of, and 

great fortunes, 175. 

tariffs and legislation, 28. 

tariffs by legislation, effect of 

fixing, 126. 

tariffs fixed by natural law, 

127. 
See Freight rates. 

Railroads, governmental manage- 
ment of, 125. 

governmental ownership of, 

250, 269. 

strike of 188(5 on Gould sy.s- 

tem of, 82. 

wrecking and reorganizing, 

251. 

Raw material ? what is, 2:34. 
Reaction, action and, 196-207. 
Real estate, is, better than other 

investments? 177. 
Realism will not cure the ills of 

society, 136. 
Reciprocity and exports, 233. 
Republican party, position, upon 

the tariff, 229. 
Retail establishment, evolution of 

the large, 190. 
Retaliation provoked by unfriendly 

tariffs, 233. 
Retribution, 288. 

inevitable, 20. 

Roads of the Roman Empire and of 
Europe in tlie INliddle Ages, 
257. 

Schools, criticism of common, 274. 
Self-interest and .social economy, 13. 
Selfishness, law of, 287. 



304 



INDEX. 



Sentimentalism leads astray, 15. 

■ methods of, vs. those of real 

business, 78. 

opposed to natural law, 152. 

Service, effect of legislation on 
rates of, 28. 

Shareholders, how interests of, can 
be protected, 252. 

relation of, to corporations, 

242. 

restrictive railroad legislation 

unjust to, 265. 

victims of a false system, 249. 

" Sherman law," 205. 

Short sellers, 70. 

Shutting down involves loss, 193. 

Silver, demonitization of, 220. 

qualities commending use of, 

for coins, 216. 

question, 221. 

ratio of value of, to gold, 219. 

Slum population, character of, 135. 

Slums need optimism, 137. 

Social economy, motive of, 13. 

evils. See Ills of society. 

Socialism as a j)olitical system, 
144-155. 

basic fallacy of, 181. 

genius of, 154. 

influence of labor unions to- 
wards coercive, 88. 

Socialistic experiments, voluntary 
local, 151. 

■ party, animus of, destructive, 

148. 

Social system, relation of, to de- 
velopment, 14. 

"War. /See Antagonism. 

Society an organism, 295. 

Solidarity of the human race, 289. 

Speculation and panics, 198. 

stimulated by dishonest cor- 
porate management, 248. 

Spoils system opposed to govern- 
mental management, 125. 

Standard of living of workmen in 
tlieU. S.,231. 

Oil Co., 191. 



Standard Oil Co., a case of suc- 
cessful competition, 37. 

why the, is successful, 67. 

State interference, 122-131. 

Stewart estate, 178. 

Stockholder. See Shareholder. 

Stock-watering, 268. 

does not aiiect the rates of ser- 
vice, 192. 

Strikes, consequences of, illus- 
trated, 81. 

Success comes by natural law, 110. 

not due to chance or luck, 180. 

secret of, 112. 

Suffering, causes must be studied 
to remove, 94. 

Sugar trust, 66. 

Supply and demand, 24-32. 

apply to charity, 138.' 

govern purchasing power of 

currency, 202. 

Tariffs and protection, 226-236. 

Technical education. See Indus- 
trial education. 

Telegraph rates, effect of reduction 
in, 69. 

Trade schools. See Industrial edu- 
cation. 

Transgressions, economic, bring 
their remedies, 288. 

Transportation, 265-270. 

rates, pool, short-lived, 28. 

See Railroads. 

Travelling facilities by rail, 
changes in, 261. 

Trusts, 61-72. 

and prices, 40. 

See Monopolies. 

Truth always beneficent, 17. 

conditions for finding, 17. 

Tulip mania in Holland, 199. 

Under-valuation and ad valorem 

duties, 234. 
Unearned increment, is there an, 

177. 
Unionism. See Labor unions. 



INDEX. 



305 



Union should be between parts 

I'onniiig productive unit, 1U2. 
Unions, unnatural, 99. 
Unselfishness, how, is mifolded, 14. 
Usui-y laws injurious, lliS. 

Value, effect of tiuctuations of, 
rf±. 

how, is affected, 40. 

how, is conferred, 72. 

ideal currency must have in- 
trinsic and stable, 212. 

sentiment a factor in, 204. 

Values, natural law weighs, 110. 

Virtues, competition applies to, 36. 

should be taught, 275. 

"Wages and labor unions, 40. 

education the basis of in- 
creased, 110. 

effect of labor unions on, 30. 

when, are increased by pres- 
sure of labor unioTis, S4. 



"Wages, how, are increased, 31. 

increase of, accompanied by 

decline of interest, 161. 
rate of, advancing, 86. 

regulated by supply and de- 
mand, 80. 

should not be fixed by the 

state, 118. 

Want, causes of, 94. 

"Watering stocks. See Stock-water- 
ing. 

"Wealth, a curse when dishonestly 
acqitired, 112. 

and its unequal distribution. 

170-183. 

— —great accumulations of, benefit 
the poor, 160. 

happiness not a necessary ef- 
fect of, 161. 

"Western Union Telegraph Co., 68. 

monopoly tends to cheapen 

service, 191. 

"Work a blessing, 110. 

theory of minimum, 02. 



SECOND EDITION 

IDEAL SUGGESTION 

THROUGH 

MENTAL PHOTOGRAPHY 

A Restorative System for Home and Private Use Preceded 
by a Study of the Laws of Mental Healing 

By HENRY WOOD 

AUTHOR OF " god's IMAGE IN MAN " " EDWARD BURTON " " NATURAL LAW IN 
THE BUSINESS WORLD " ETC. 

Clottx ^1.25 

Part I. of this work is a study of the laws of Mental Healing, and Part II. em- 
bodies them in a restoraiive system, formulated and arranged for home and private 
use. Visionary and impracticable aspects of the subject are eliminated, and a scien- 
tific basis is found. The book is not technical, but thoroughly plain and concise, and 
will prove a boon to invalids and a valuable addition to the substantial literature of 
the subject. 

PRESS OPINIONS 

B. O. FLOWER in " The Arena " 

" Recently, however, some scholarly and finished works have ap- 
peared, which will take high rank as literature, and will doubtless 
hold a permanent place among the thoughtful and thought-inspiring 
books of the present generation. Notable among theiu are Professor 
Wait's * Law of Laws ' and Henry Wood's latest work, ' Ideal Sug- 
gestion THROUGH Mental Photography.' This last work is one of 
the most charming volumes of essays of recent years. Henry Wood 
is the Emerson of the new metaphysical thought, and in his writings 
there is a certain wealth of thought and felicity of expression not 
found in Emerson. I know of no American essayist to-day who 
clothes his ideas in such a wealth of rhetorical expression, and who 
is never verbose, as Mr. Wood. If his style is florid and poetic, 
there is never any superfluous word or sentiment introduced for ar- 
tistic effect. He has a magnificent command of language, and ex- 
presses his ideas with rare felicity, which makes anything coming 
from his pen delightful reading, even though one may differ radically 
with the thought expressed. In the present volume Mr. Wood ap- 
pears at his best as an essayist. Indeed, in many chapters he seems 
to even surpass any former work. 



"'Ideal Suggestion ' is divided into three parts. The first treats 
of the Laws of Mental Healing. In this section are five chapters, 
which for clearness, conciseness, fluency of expression, have rarely 
been equalled. The subjects discussed are : The Obstacles to Pro- 
gress, The Body, The Power of Thought, Planes of Consciousness, 
Inferences and Conclusions. 

" Part second deals with Ideal Suggestion, and contains practical 
suggestions for those who wish to treat themselves along the line of 
mental healing. The third division contains Meditation and Sugges- 
tion, in which are given twenty short lessons, and an equal number 
of thought phrases to be held mentally. 

" The volume is handsomely printed in large type on heavy paper, 
and beautifully bound. It is a work which every person interested in 
metaphysical healing should possess, and will be an admirable vol- 
ume to loan persons interested in this thought." 



THE BALTIMORE METHODIST expresses its opinion thus 
freely 

" Henry Wood, author of ' God's Image in Man ' and other interest- 
ing books which have gone through a number of editions, has just 
given to the public, through the well known Boston publishers, 
Lee and Shepard, another volume, entitled Ideal Suggestion through 
Mefital Photography. Anything Mr. Wood writes will find numerous 
readers because of his style, if for no other reason. We doubt if he 
is excelled in this particular by any other English writer. He is, 
however, more than a master of style. He is a profound reasoner, 
plunging fearlessly into the depths of mental philosophy and psychol- 
ogy. As a study of the laws of mental healing, his book is a good 
one, but the attempt which he makes to formulate from these laws a 
restorative system by which individuals may eradicate disease with- 
out the use of any other means than mental causation we think rather 
visionary. That disease has its seat in the mind alone, and not in 
the body, we are not prepared to credit. Other animals than man 
suffer from disease. Will 'ideal suggestion ' meet their case.' We 
believe that both mental condition and faith will contribute much to 
recovery from disease, but we do not believe that either will avail 
anything where material means are requisite and available. We sus- 
pect this volume, like others, by the same author, is but an outgrowth 
of ' the new theology of evolution.' It is good reading, but poor 
gospel." 



BOSTON TIMES 

" Mr. Wood is sufficiently well known as an ' unprofessional,' con- 
servative psychologist to ensure thoughtful and respectful treatment 
of any effort he may make in this field; and we do not question that 
many persons will be richly rewarded for the attention they give to 
this, his latest work. The ordinary text-book on mental healing is an 
ill-digested medley of occultism, metaphysics and jargon. A special 
illumination is required to read it, and not even the author under- 
■ stands it. But Mr. Wood has taken pains to be lucid, is eloquent at 
times, and is always direct, fair-minded and hopeful. The most con- 
firmed materialist might read with a degree of pleasure, and since 
investigation and belief seem to be tending in the direction of Mr. 
Wood's theories, it is likely that his comprehensive precept will 
largely lead to practice." 

F/?0 VIDENCE JO URNAL 

" Lest the reader should not easily discover from his title, the sub- 
ject of Mr. Wood's volume, one may explain it, roughly, as mind 
cure — an attempt to find in mental causation both a scientific and a 
spiritual basis for bodily healing and health. The book is not too 
technical, it is interesting and suggestive even to those who believe 
that the great commission, ' Preach the Gospel and heal the sick,' 
has existed ever undivided in the church ; who do not believe that a 
direct answer to prayer implies that God is subject either to change 
or improvement, or that a belief in the sacredness of relics, and the 
possibility of miracles wrought through them is what he terms 'pure 
superstition.' The first portion of his book is devoted to a study 
of the laws of Mental Healing; the second to restorative system of 
meditations arranged for private use. Mr Wood's interest in the 
subject is unprofessional, and he is well known as an interesting, 
thoughtful writer upon cognate topics." 

CHICAGO CHRISTIAN METAPHYSICIAN 

"This volume will wear well, it has staying qualities, the plan is 
readily understood and can be used by a novice or a profound 
Scientist, the benefit realized differing only in degree since its use 
will always result in some good spiritually, mentally and physically. 
We heartily commend this latest, best and most helpful book by this 
thoughtful, progressive author. This is a book of purity and health, 
scientific and practical. 

% 



BOSTON IDEAS 

" Mr. Wood is of a nature that enables him and his writings to 
materially assist in the promulgation of the practical enlightenment 
which the truths of mental-healing (so long judged by the errors of 
its representatives) alone can give. An absolute truth eventually 
expresses itself; it is inevitable. And those whose aroused spirits 
have perceived and absorbed to ever so small a degree that spark 
which vitalizes human consciousness will necessarily keep on seeking 
new light from the same source; and those inclined to be somewhat 
'irrational* in their flights will gain immeasurable good from Mr. 
Wood's clear, incontrovertible statements. 

"The value of clear, direct announcement, insistently reiterated and 
kept before the thought is embodied in the system of ' meditations ' 
which occupies the latter portion of the book. It will strengthen a 
negatively inclined mind and invigorate or leaven a positive one." 

PORTLAND TRANSCRIPT 

" That the mental attitude affects the physical condition of humanity 
is an indisputable fact. That as a result there has been a great deal 
of ' mind-cure ' knavery is also a fact. But there are underlying 
scientific principles in regard to this matter that are now receiving 
attention. We are glad to call the attention of our readers to a work 
upon this important subject by a man who is well known as a careful 
and capable writer upon psychological and metaphysical topics. The 
title of the book is Ideal Suggestion through Meittal Photography. 
The author is Henry Wood, whose other books are ' God's Image in 
Man,' ' Natural Law in the Business World,' and ' Edward Burton,' 
a novel. He is an independent investigator and has given the sub- 
ject much study besides having had unusual personal experience. 
The book should prove of great value to invalids if they are only 
intelligent enough to profit by its wise advice and are not those un- 
fortunates who are ' enjoying poor health,' as the saying is." 

Cloth Price $1.25 

Sold by all booksellers and sent by mail on receipt of price. 
Catalogues sent free 

LEE AND SHEPARD Publishers Boston 



^N INTERESTING "BOOK. 



GOD'S IMAGE IN MAN. 

Some Intuitive Perceptions of Trutih 

BY HENRY WOOD, 

BOSTON, U.S.A.. 

AUTHOR OF " inKAI.SUr.(;i-STIOX,"' "EDWARD BURTON," " THK POLITICAL ECONOMY 
OF NATURAL LAW," ETC., ETC. 

In Cloth, 258 pages, $1.00. 

Sold by all Booksellers, or sent, postpaid, by the Publishers, LEE AND 

SHEPARD, Boston, on receipt of the price. 



CONTENTS. 

/. The Nature of God. VII. The Solidarity of the Race. 

II. Revelation through iVattire. VIII. illaii's Dual iVature. 



III. Direct Revelation. 

IV. Biblical Revelation. 

V. Revelation through the Son. 

VI. The Universality of Laiv. 



IX. The Unseen Realm. 
X. Evolution as a Key. 
XI. From the Old to the New. 



" Its pure and elevated style is wonderfully attractive. This volume 
is one of rare value." — Boston Traveller. 

"A notable treatise on the new theology of evolution." — Brook- 
lyn Eagle. 

" It is certainly instinct with spiritual vitality. It is filled with the 
light which the scientific method has kindled." — Boston Home 
Journal. 

" An honest, able, and promising effort to free faith from unneces- 
sary incumbrances." — AVzw York Independent. 

" Mr. Wood has done us a service, and we trust that many will 
receive from the same and subsequent volumes spiritual quickening." — 
The Critic (New York). 

"A volume full of deep and suggestive ideas from the standpoint of 
the theology of the divine immanence." — The Christian Union (New 
York). 

I 



"The book cannot fail to prove helpful in the renaissance of Chris- 
tianity fhav is going on in our day." — The Uiiitarian (Boston). 

" The book is profoundly religious in tone, and breathes the spirit 
of the so-cailed new orthodoxy." — The Review of Reviews. 

"The fact that the unseen universe is as accessible from America as 
from India is one which the Western thinker has been slow to grasp, 
and Mr. Wood has been perhaps the first to present it frankly yet deli- 
cately with an absolute absence of that occult assumption which has 
done more than anything else to prejudice the intellectual world against 
the investigation of psychic questions, involving an intimate acquaint- 
ance with one's own soul and its possibilities." — Kansas City Mail. 

" The book is vigorous and suggestive." — Sa7i Frajtcisco Chi-onicle.. 

" Mr. Wood writes for thoughtful men on serious topics." — Chicago 
Herald. 

"One need not always agree with Mr. Wood in his theories to take 
pleasure in reading his books. He is never dull; he is always reverent 
when speaking of things which others revere, though some of these 
things may be regarded by him as groundless superstitions; there are 
scores of excellent thoughts flowing from his pen, which serve to in- 
spire one to better things than the common round of every-day grind. 
His ' Edward Burton ' was an uplifting, religious novel, which has 
passed through several editions and will pass through many more, for 
it pleases the always-increasing American -nobility class — the readers 
whose motto is always and everywhere noblesse oblige," — British 
American Citizen (Boston). 

"Mr. Henry Wood, who has gained many readers by his ' Ns^-^.ura] 
Law in the Business World,' and by his articles up'^n religious s^'b- 
jects which have appeared in the magazines, has justified the hopes of 
his admirers in his last work, ' God's Image in Man,' in which he dis- 
cusses some of the most important theological questions of the day in 
a most common sense manner. The author is an original thinker anc? 
depends for his statements upon neither dogma nor prejudice." — Bos- 
ton Courier. 

"The religious world could better afford to lose whole volumes oi 
dreary commentaries and reflections among the tombs, and such like 
aids to future happiness and present somnolence, than one page of such 
illuminating and inspiring writing as this." — Charleston! A^ews and 
Courier. 

a 



" It is both a pleasing and profitable book." — Chicago Inter-oceau. 

"The book glows with both beauty and power." — Ohio Stale 
youriial. 

"Mr. Wood is a keen and logical thinker, and a lucid and forcible 
writer." — The Beacon (Boston). 

" This new book, by Henry Wood, is the product of an intuitive 
perception of Truth. It presents the principle of Divine Science in an 
entertaining style, by illustrating the problem of Life in various ex- 
amples, and in a manner that will prove most interesting and instruc- 
tive to all thinking people." — Harmony (San Francisco). 

"The author does not follow any strict logical or philosophical 
method, but gives free rein to the imagination, and his style is poetic 
rather than dryly argumentative. He is broad, catholic, and progres- 
sive in his views of religion, and logical. The volume is, on the whole, 
an earnest, catholic, thoughtful exposition of modern ideas of religion 
and man's relation to the universe; and many who have been ham- 
pered by the trammels of mediaeval thought may find help in this book." 
— The Christian Register (Boston). 



Press Notices of another of OvlR. WOOD'S "Books. 

EDWARD BURTON. 

zAn Idealistic Metaphysical Novel 

" ' Edward Burton ' would be called a religious novel. The funda- 
mental thought is the outworking of souls toward light and love from 
the bondage of oppressive dogma and unreasoning belief. But, unlike 
many religious novels, the story is not dull, nor does the movement 
drag." — The Christian Union (New York). 

" A very powerful story, which holds the reader's attention from 
beginning to end. Into a pretty love-idyl the author has woven a 
vigorous account of the influence exerted by the numerous systems of 
theolog}-, ethics, and sociology, which in our day excite so much 
attention." — Peterson's Magazine (Philadelphia). 



"There are some admirable character studies, among them 
being a snobbish ' milord,' a German Anarchist, and a liberal- 
minded clergyman of keen spiritual insight and refinement of 
thought and feeling. The ideals are high, and the book is 
altogether a stimulating and developing piece of work. The 
author has already made a wide reputation for himself by his 
book entitled ' Natural Law in the Business World.' — Public 
Opinion, Washington, D.C. 

"It is difficult to find words to fully express the pleasure 
we are sure will be derived — at least, by those interested in 
the search for absolute truth — from the novel entitled ' Ed- 
ward Burton,' written by Henry Wood. It may be termed a 
religious novel in the sense that it teaches the purest, truest, 
most unbiased, most truly practical ' religion ' of any novel we 
have known written on the subject. It cannot be termed 
religious in the sense of subscribing to any creed, or of lend- 
ing authority to any code whose only life lies in the externals 
of things. The attempt to put into concrete form our impres- 
sions of ' Edward Burton ' so leads us off into the so infinitely 
many and mingled thoughts which each and every page of 
the book calls forth that we feel our most sensible word is, 
' Read for yourself ' — which we can say with all-heartiness." 
— Boston Times. 

" ' Edward Burton ' is a delightful book in all its sketches of 
out-door life ; the sea, the streams, the woods, the mountains, 
shady nooks, walks by moonlight, the varying influence of 
the weather, and all the voices of Nature are brought to us 
with charming reality and in wholesome, generous plenty. 
As a story, it leaves a pleasant after-taste in one's mind. The 
outcome is neither tragic nor disappointing ; the best people 
are not dragged into shreds and left on the harrow's teeth, 
nor are the villains successful, as things must be, you know, 
in the high art of realism. We have given considerable space 
to Mr. Wood's book, because it is an unusual and a thought- 
provoking work. The influence of a thinker who is a deep 
delver, and who is alwaj'S serious and earnest, comes out of 
the story, or rather from between the links of the story." — 
N.Y. Independent. 

a 



" It is refresliing to take up a book that is emjjhatically a 
book of ideas." — The Writer, Boston. 

" The descriptions of natural scenes are line, and cause us 
to breathe their very air. Whether of the seashore or the 
mountain, the tone of the novel is really that of a romance 
clothed in familiar incidents. The heroine, Helen Bonbright, 
by indefinable touches, is a nobly idealized but individual type 
of spiritual womanhood." — Andover Review. 

" His comprehensiveness of character, and tlie author's 
power of imparting the same, show nuK;h aljility and tact. 
The sentiment therein exjiressed will echo and re-echo in 
many a heart." — Falmouth Local. 

" The excellence of the language is one of the chief charms 
of tlie work, and the careful reader cannot but be impressed 
with the idea that the author is a close observer, a profound 
thinker, and an excellent scholar." — Sacramento Bee. 

"Few books of tlie character of 'Edward Burton' have 
been issued that have received more attention from men of 
thought and students of the idealistic school than this novel is 
destined to attract." — Wheeling Intelligencer. 

" It is finely written, and, although the author does not, 
perhaps, intend to rebuke anything or anybody, it is, neverthe- 
less, a rebuke to much of the realistic, analytic, and pessimistic 
literature of the day." — Toledo Blade. 

" The plot is artistically excellent, and its working, as well 
as the literary style, is easily marked as elegant." — Nashville 
American. 

" Xo one can read it without having his understanding 
enlightened and his aspiration toward the higher life quickened 
and inci'eased. The book is written, too, in an easy and 
•graceful style, and contains enough of pleasant and romantic 
incident to interest the ordinary reader of fiction." — New 
Christianity , Philadelphia. 



AN IDEALISTIC METAPHYSICAL NOVEL 



EDWARD BURTON 



By HENRY ^VOOD 

Author of " Natural Law in the Business World," etc. 
Fourth Edition. 

In cloth, 299 pages, $1.25. In paper covers, 50 cents. 



" We have found gi'eat profit in tlie various economic and 
etiiical papers of Henry Wood, and now that his venture in 
fiction is before us, we are predisposed to favorable judgment. 
It seems to us that ' Edward Burton ' will be generally re- 
garded as a story of more than ordinary merit. The conven- 
tional realistic lines are rejected. But of high thinking in 
fields of optimistic outlook and of religious meditation, ex- 
pressed in the idealization of character, there is abundance. 
' Edward Burton ' would be called a religious novel. The 
fundamental thought is the outworking of souls toward light 
and love from the bondage of oppressive dogma and unreason- 
ing belief. But, unlike many religious novels, the story is 
not dull, nor does the movement drag." — The Christiaii Union, 
New York. 

" A very powerful story, which holds the reader's attention 
from beginning to end. Into a pretty love-idyl the author 
has woven a vigorous account of the influence exerted by the 
numerous systems of theology, ethics, and sociology, which in 
our day excite so much attention." — Peterson's Magazine, 
Philadelphia. 



^^g°'FoT additional press opinions, see the foHoioing pages. .c:,^^ 



Sold by all Booksellers, or sent, postpaid, by the Publishers, LEE AND 

SHEPARD, Boston, on mnainl of fha nrice. 

1 



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